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THE   POLITICAL  ECONOMY  OF  HUMANISM 
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LEE    and    SHEPARD    Publishers 
BOSTON 


THE 


POLITICAL    ECONOMY 


HUMANISM 


BY 

HENRY   WOOD 

AUTHOR  OF  "  IDEAL  SUGGESTION  THKOUGH  MENTAL  POOTOGKAPHY  ' 

"  GOD'S  IMAGE  IN  MAN  "   "  STUDIES  IN  THE  THOUGHT  WOBLD  " 

"  EDWAKD  BUBTON  "   "  VICTOB  8EBENUS  "  ETC. 


The  whole  world  around  iis,  and  (he  tohole  world  within  us,  are  ruled  by  Late. 

The  Duke  of  Argyll 


BOSTON 
LEE    AND    SHEPARD    PUBLISHERS 

1901 


COPYEIGHT,  1901,   BY  HeSRY  WOOD 

All  Bights  Reserved 
The  Political  Economy  of  Humanism 


Copyright,  1894,  by  Heney  "Wood 
All  Rights  Reserved 

AS 

The  Political  Economy  of  Natdkal  Law 


ELECTBOTYPING  by  C.  J.  PETEES  &  SON 

Pbbsswobk  bt  Rockwell  &  Cucbchjll 


PREFACE. 


To  have  life  and  practicality,  political  economy  should 
be  studied  in  connection  with  its  counterpart,  the  human 
constitution.  Its  positive  element  is  subjective,  while 
environment,  or  the  objective,  only  constitutes  its  negativ- 
ity. In  other  words,  mind  is  the  active  worker,  while  labor, 
capital,  land,  wages,  profits,  and  values  are  its  instruments 
or  outward  articulations.  Cooperation  and  competition 
are  not  external  qualities  belonging  to  some  legal  frame- 
work or  social  system,  but  are  dispositions  in  man.  They 
cannot  be  put  on  or  off  as  occasion  may  demand,  but  are 
matters  of  moral  and  ethical  education.  So,  too,  a  true 
socialism  is  not  a  matter  of  political  form,  but  its  location 
must  be  within  the  human  heart  and  consciousness. 

This  is  no  attempt  to  make  people  content  with  things 
as  they  are,  but  to  turn  the  search  for  improvement  in  a 
promising  direction.  Unrest  and  agitation  are  vastly  bet- 
ter than  stagnation,  but  to  bring  the  best  results  they 
must  be  wisely  practical  and  in  harmony  with  Law. 

The  general  purpose  of  this  volume  is  the  outlining  of 
a  political  economy  which  is  natural  and  practical,  rather 
than  artificial  and  theoretical.  While  independent  of  pro- 
fessional methods,  it  aims  to  be  usefully  suggestive  to 
the  popular  mind.      As   a  treatise,   it   is   not  scholastic, 

5 


6  PREFACE. 

statistical,  or  historic,  but  rather  an  earnest  search  for 
inherent  laws  and  principles. 

In  1894  the  author  issued  a  work  entitled  "  The  Political 
Economy  of  Natural  Law,"  which  was  well  received,  and 
which  called  out  hundreds  of  commendatory  notices  from 
the  best  class  of  critics  and  newspapers.  It  passed 
through  four  editions.  The  present  volume,  though  con- 
taining much  of  the  same  matter  (revised),  has  two  addi- 
tion chapters  upon  current  topics  of  special  interest. 
With  this  revision  and  addition,  it  is  thought  best  to 
change  the  title  to  one  which  perhaps  is  more  expressive 
of  the  viewpoint  and  purpose  of  the  volume. 

The  different  factors  of  society  need  to  be  drawn  to- 
gether and  not  rent  more  widely  apart.  Negative  condi- 
tions exist ;  but  they  will  not  be  improved  by  stimulating 
their  realism,  or  by  the  assumption  that  they  are  inherent. 
Idealism  is  as  wholesome  in  sociology  as  elsewhere.  True 
sympathy  for  prevailing  ills  does  not  express  itself  in  a 
morbid  pessimism,  but  in  pointing  out  the  road  to  improve- 
ment and  in  inspiring  hope  and  courage. 

Conventional  political  economy,  as  professionally  for- 
mulated, lacks  a  practical  element  which  renders  it  of  lit- 
tle utility  in  actual  experience.  Not  being  fitted  into  the 
nature  and  constitution  of  man,  it  is  largely  a  mass  of 
fine-spun  intellectual  abstraction.  If  the  absorption  of 
ponderous  tomes  of  scholastic  political  economy  does  not 
add  to  one's  equipment  for  the  practical  business  of  life, 
it  is  not  easy  to  discover  its  usefulness. 

The  "cause  of    labor"  has  been  injured  by  crowding 


PREFACE.  7 

under  its  banner  many  fallacies,  and  even  more  by  the 
assumption  that  its  interest  is  naturally  antagonistic  to 
that  of  other  social  elements.  Society  is  a  complex  or- 
ganism, or  Greater  Unit,  and  "  when  one  member  suffers, 
all  suffer."  The  mischievous  doctrine  of  a  necessary  di- 
versity is  largely  responsible  for  prevailing  frictions  and 
antagonisms.  The  fault  is  not  with  the  "  social  system," 
but  with  abuses  which  are  the  fruitage  of  moral  delin- 
quency in  personal  character.  Labor  and  capital,  when 
deeply  defined,  melt  into  each  other. 

The  writer  will  yield  to  no  one  in  the  intensity  of 
his  desire  to  promote,  not  only  the  public  weal,  but  the 
interest  of  labor  in  its  completeness.  In  whatever  way 
superficial  critics  may  construe  detached  statements  of 
this  book,  the  fact  will  remain  that  its  deepest  intent 
and  animus  is  the  true  welfare  of  the  workingman. 

The  recognition  of  the  universality  of  Law  is  the  great- 
est achievement  and  inspiration  of  modern  times,  and  it 
is  no  less  regnant  in  social  economics  than  in  physical 
science.  Circumstances  and  conditions  change,  but  the 
orderly  relations  of  cause  and  effect,  as  seen  in  human 
character  and  its  social  and  economic  manifestations  con- 
tinue uniform.  All  improvement  must  come  through  a 
better  interpretation  of  and  conformity  to  underlying  bene- 
ficent laws  and  principles. 


CONTENTS 


PAGE 

I.     General  Principles 11 

n.    Supply  and  Demand 23 

III.  The  Law  of  Competition 33 

IV.  The  Law  of  Co-operation 41 

V.    Labor  and  Production 49 

VI.     Combinations  of  Capital 59 

VII.     Combinations  of  Labor 73 

Vni.     Employers  and  Profit  Sharing 97 

IX.  Employees  :  Their  Obligations  and  Privileges  107 

X.     Governmental  Aebitration 115 

XL  Economic  Legislation  and  Its  Proper  Limits  .  121 

XII.    Dependence  and  Poverty 133 

XIII.  Socialism  as  a  Political  System 143 

XIV,  Can  Capital  and  Labor  be  Harmonized  ?   ,     .  157 
XV.  Wealth  and  Its  Unequal  Distribution  .     .    .  169 

XVI.     The  Law  of  Centralization 185 

XVII.  Action  and  Keaction,  or  "Booms"  and  Panics  195 

XVIII.    Money  and  Coinage 209 

XIX.     Tariffs  and  Protection 225 

XX.    The  Modern  Corporation 237 

XXI.  The  Abuses  of  Corporate  Management  .     .    .  245 

XXII.     The  Evolution  of  the  Railroad 255 

XXIII.  Industrial  Education 271 

XXIV.  Natural  Law  and  Idealism 283 

XXV.     Gold  Production  and  Values 296 

XXVI.  Social  Experiments  in  Australasia    ....  300 

Analytical  Index 311 


GENERAL  PRINCIPLES. 


"  Mark  lohat  unvaried  laws  preserve  each  state, 

Laws  wise  as  nature,  and  as  fixed  asfate.''^ 

Pope. 

"  There  is  a  higher  law  than  the  constitution.^'' 

William  H.  Seward. 

^^  All  are  hut  j) arts  of  one  stupendous  whole, 

Whose  body  nature  is,  and  God  the  souV 

Pope. 

"  When  we  pass  from  the  phenomena  of  Matter  to  the  phenomena 
of  Mind,  we  do  not  pass  from  under  the  Reign  of  Law^ 

The  Dukk  of  Argyll. 


THE  POLITICAL  ECONOMY 
OF  HUMANISM. 


I. 

GENERAL  PRINCIPLES. 

Before  entering  upon  any  systematic  study  of  the  inher- 
ent economic  laws  which  permeate  and  shape  the  business 
world  as  it  is  at  present  constituted,  it  is  well  to  suggest 
that  many  existing  limitations  at  some  future  period  may 
be  outgrown.  Natural  Law  is  never  suspended  or  repealed 
by  any  force  which  can  be  exerted  upon  the  same  plane  ;  but 
it  is  axiomatic  that  a  higher  law  may  overcome  a  lower  one. 
When  we  lift  a  weight,  gravitation  is  not  suspended,  but  its 
force  is  overcome  by  the  superior  law  of  the  human  will. 
Tree-life  causes  the  sap  to  ascend,  not  by  repealing  gravity, 
but  by  surmounting  it.  The  predominant  motive  of  social 
economy,  on  the  present  plane  of  human  development,  is 
self-interest ;  but  this  does  not  always  amount  to  selfishness, 
nor  does  it  imply  that  individual  interests  are  necessarily 
antagonistic  to  each  other.  Normal  self-interest  is  not  only 
honest,  but  entirely  compatible  Avith  philanthropy.  But 
when,  in  the  hoped-for  golden  period  of  the  future,  human- 
ity comes  into  a  general  recognition  of  the  higher  law  of 
unselfishness,  this  superior  force  will  reach  down  and  over- 
come many  laws  that  are  inherent  and  unrepealable  on  their 
own  plane.  Such  an  advanced  condition  of  society  is  to  be 
earnestly  labored  for;  but  any  present  study  of  business 
tendencies  must  be  made  in  the  light  of  existing  conditions 


14  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

and  developments.  Nationalists  and  communists,  even 
though  well-intentioned  —  as  the  great  majority  undoubtedly 
are  —  will  never  be  able  to  galvanize  unselfishness  upon 
humanity  from  the  outside,  through  governmental  legisla- 
tion or  communistic  social  framework.  It  will  only  be  un- 
folded as  the  natural  outward  expression  of  higher  internal 
character. 

Natural  Law,  as  it  is  considered  in  this  work,  embraces 
in  its  scope  the  forces  and  tendencies  which  are  at  present 
operative.  To  hasten  the  evolution  of  higher  social  and 
economic  conditions,  a  beginning  must  be  made  among 
the  existent  underlying  antecedents  which  will  produce 
them.  Any  inversion  of  this  natural  order  will  retard  the 
coming  ideal.  To  spend  our  time  and  energy  on  the  outside, 
is  only  to  whiten  the  "  sepulchre."  Higher  attainments  in 
any  department  are  helped  forward  by  the  faithful  use  of 
those  already  actualized.  When  the  grand  reign  of  unself- 
ishness is  finally  ushered  in,  it  will  come  as  an  evolution- 
ary growth,  "without  observation."  It  will  be  just  as 
"  natural,"  in  its  due  course,  as  any  of  the  lower  accom- 
plishments which  preceded.  Forces  now  operative  will 
never  be  repealed  in  their  own  province,  but  gradually  out- 
grown. The  hope  of  the  future  lies  entirely  in  the  expan- 
sion and  upliftment  of  character.  When  altruism  and 
brotherhood  are  kindled  in  the  human  soul,  they  will  find 
outward  manifestation,  and  nothing  can  prevent  it.  All 
growth  is  from  within,  outward,  for  such  is  the  eternal 
order,  and  no  human  power  can  reverse  it.  The  unnatural 
cannot  be  made  natural,  or  grapes  gathered  from  thistles. 
The  most  ideal  and  perfect  legislation  that  it  is  possible  to 
conceive  is  powerless  to  raise  men  from  the  plane  of  self- 
interest.  Lifting  force  comes  from  internal  education  and 
evolution. 

The  present  "  social  system  "  —  bearing  in  mind  that 
its  abuses  are  no  real  part  of  it  —  is  the  only  one  that  will 


GENERAL  PRINCIPLES.  15 

serve  humanity  in  its  present  stage  of  development.  As 
well  fit  an  artificial  shell  to  the  back  of  a  tortoise,  as  to 
frame  any  new  external  order  to  suit  present  ethical  con- 
ditions and  necessities.  There  are  many  such  artificial 
shells  proposed,  each  of  which  is  warranted  to  fit  —  in  fact 
to  be  a  universal  panacea  —  for  existing  ills.  Among  them 
are,  land  in  common,  governmental  transportation,  an  in- 
come tax,  limited  fortunes,  unlimited  silver,  gold  mono- 
metallism, unlimited  "greenbacks,"  a  high  tariff,  a  low 
tariff,  free  trade  —  all  these  and  many  more.  Without  any 
argument  at  present  as  to  the  merits  or  demerits  of  these 
proposed  measures,  the  point  is  only  made  in  this  connec- 
tion that  it  is  beyond  their  power  and  range  to  remedy 
existing  economic  ills.  If  ever  the  time  arrives  when  true 
socialism  pure  and  simple  is  practical,  as  a  form  of  govern- 
ment, neither  it  nor  any  other  external  system  will  be 
needed.  At  that  high  evolutionary  stage  every  man  can 
and  may  be  a  law  unto  himself.  Non-resistance  and  un- 
selfishness will  then  comprise  the  brief  but  unwritten  code 
of  humanity.  At  present,  any  new  or  forced  artificial  social 
framework  would  rather  retard  than  aid  a  natural  growth 
towards  more  ideal  conditions. 

Economic  evils,  now  so  prominent  and  universal,  are  not 
the  outcome  of  the  present  "  social  system,"  but  of  the 
abuses  which  fasten  themselves  to  it,  consequent  upon 
general  moral  delinquency.  They  are  not  a  real  part  of 
it,  but  are  like  barnacles  on  the  bottom  of  a  ship.  Human 
pride  is  reluctant  to  look  within  for  deficiencies,  but  will 
roam  to  the  ends  of  the  earth  to  locate  them  outside.  There 
is  no  social  system,  or  any  other  human  institution,  so  per- 
fect, that  abuses  do  not  creep  in.  Stealing  and  cheating  are 
abuses.  They  are  not  a  normal  but  an  abnormal  part  of 
the  present  order.  These  reflections  are  pertinent  because 
sentimental  theorists  make  our  social  system  the  scape- 
goat for  almost  every  overt  violation   of  the  Decalogue. 


16  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

Every  genuine  has  its  counterfeit,  and  every  positive  its 
negative.  Tlie  present  order,  in  its  purity,  is  the  only  one 
for  existing  conditions,  because  it  is  their  natural  index 
and  outcome.  It  fits  what  is  back  of  it  as  the  photograph 
represents  the  negative.  The  outer  must  correspond  with 
the  inner,  else  law  and  sequence  would  be  at  fault,  and  the 
chain  which  binds  cause  and  effect  be  severed. 

In  political  economy,  as  elsewhere,  an  intelligent  study 
of  phenomena  is  only  possible  in  the  light  of  its  unseen 
though  ever  potent  laws  and  causation.  The  most  useful 
knowledge  that  is  attainable  in  any  realm  embraces  pri- 
marily the  comprehension  of  its  underlying  relations  and 
chains  of  sequence.  The  scientific  standpoint  from  which 
to  view  human  manifestations  takes  in,  not  merely  present 
activities,  but  those  which  reach  backward  and  forward. 
Phenomena  are  the  exact  fruitage  of  antecedents.  Science 
formerly  made  but  slow  progress,  because  its  attention  was 
fixed  upon  superficial  manifestations,  while  hidden  beneath 
them  were  the  universal  and  immutable  forces  of  law.  The 
effort  has  always  been  made  to  "  patch  up  "  from  the  out- 
side, whereas  real  growth  takes  place  in  layers  from  the 
centre  outward. 

The  phenomena  of  electricity  have  been  before  the  eyes 
of  the  world  for  all  the  past  centuries,  but  until  recently 
there  was  little  systematic  study  of  its  laws.  Now  that 
these  are  beginning  to  be  grasped,  it  ceases  to  be  mere  un- 
interpreted manifestation,  and  becomes  a  tamed  and  benefi- 
cent agent  of  utility.  The  world  has  been  almost  surprised 
to  find  that  Natural  Law  can  invariably  be  relied  upon. 
In  the  whole  illimitable  cosmos,  material  and  immaterial, 
there  is  nothing  capricious  or  uncertain.  At  first  glance, 
there  is  much  that  seems  to  happen ;  but  it  may  be  safely 
assumed,  that  no  event  ever  took  place  without  an  endless 
chain  of  causation  leading  up  to  it,  link  by  link. 

The  scope  of  orderly  law  being  unlimited,  it  manifestly 


GENERAL  PRINCIPLES.  IT 

includes  every  side  and  phase  of  social  economics.  In  the 
economic  domain,  statistics,  tariffs,  coinage,  currency,  cap- 
ital, and  labor  have  received  abundant  study ;  but  all  these 
are  only  the  multiform  visible  expressions  of  the  working 
of  natural  law.  Either  of  them  when  considered  by  itself, 
outside  of  its  larger  unitary  relations,  becomes  dispropor- 
tionate and  misleading.  Events  are  unimportant  except  as 
their  significance  is  interpreted.  Statistics  are  only  finger- 
boards to  show  the  way  to  lo,-^ -fulness.  Their  meaning  and 
relation  is  the  real  problem  pressing  for  solution.  On  the 
troubled  surface  of  the  sea  of  finance  there  is  a  confused 
array  of  facts,  events,  ups  and  downs,  sentiments,  and 
opinions,  which  are  well-nigh  valueless  so  long  as  they  lack 
orderly  translation. 

If  Natural  Law  in  its  immutable  tendencies  be  reliable, 
and  also  serviceable  when  intelligently  comprehended,  it  is 
important  that  its  hidden  leadings  be  searched  for  and  dis- 
covered. But  to  successfully  accomplish  this,  we  must 
divest  ourselves  of  all  prejudice,  and  seek  the  truth  for  its 
own  inherent  value.  Its  deep  lines  can  never  be  bent  or 
distorted,  but  owing  to  preconceived  theories  numerous  sub- 
jective illusions  and  inversions  are  possible.  The  desire  to 
find  a  certain  opinion  true,  often  clouds  the  reality.  To 
truly  learn,  it  is  necessary  to  unlearn.  The  vital  trvith  is 
always  beneficent,  even  if  at  first  sight  it  have  an  unwel- 
come, or  possibly  an  adverse  aspect.  To  find  the  ''whys 
and  wherefores  "  of  any  fact  is  a  long  step  towards  divining 
its  place  and  use.  Take  the  law  of  competition.  Viewed 
superficially  —  especially  when  applied  to  labor  —  it  has 
hard  and  repulsive  aspects.  Shall  we  then  deny  the  ex- 
istence of  such  a  law,  and  denounce  all  competitive  effort  as 
unmitigated  selfishness,  or  not  rather  look  deeper  to  see 
if  correct  interpretation  will  reveal  utility  and  even  benef- 
icence ?  Is  there  constructive  competition  as  well  as  that 
which  is  destructive  ?     May  it  not  be  its  abuse  which  is 


18  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

adverse,  and  will  not  a  more  discerning  view  show  that  it 
supplements  co-operation  ?  Is  there  not  healthful  competi- 
tion as  well  as  that  which  is  unhealthful  ?  Can  there 
not  be  competitive  giving,  being,  and  doing,  as  well  as  get- 
ting and  monopolizing  ?  It  is  far  wiser  to  rightly  adjust 
any  universal  principle  than  to  deny  its  place,  or,  perhaps, 
hastily  conclude  that  it  is  only  "cruel."  Competition  be- 
tween two  market-men  may  help  to  feed  a  whole  needy 
neighborhood.  Every  thing  has  its  place  in  the  general 
unitary  Whole,  and  when  its  true  relations  are  disclosed  its 
seemingly  adverse  features  become  neutralized  or  even  trans- 
formed. A  perfect  sphere  has  roundness  and  smoothness, 
but  its  detached  fragments  are  each  irregular  and  jagged. 
A  fact  or  principle  viewed  out  of  its  logical  environment 
does  not  show  its  truth.  Any  intelligent  synthetic  method 
is  far  too  rare.  To  analyze,  dissect,  and  sever,  often  snaps 
the  ties  of  relationship  and  leads  to  unprofitable  dogmatism. 
Natural  Law,  as  applied  to  the  domain  of  Political  Econ- 
omy, is  defined  by  Webster  as  "  a  rule  of  conduct  arising 
out  of  the  natural  relations  of  human  beings,  established  by 
the  Creator,  and  existing  prior  to  any  positive  precept." 
Natural  Law  in  the  economic  realm  is  not  different  from 
that  which  runs  through  physics,  morals,  mechanics,  and 
science.  It  is  but  one  of  the  many  subdivisions  of  Univer- 
sal Natural  Law,  or  the  grand  Unity  of  Truth.  In  other 
words,  the  principles  which  reign  in  the  department  of  po- 
litical economy  are  not  artificially  fenced  off  in  a  field  by 
themselves,  but  they  have  a  most  intimate  connection  with 
all  the  other  subdivisions  of  orderly  facts.  There  is  also  a 
corresponding  kinship  in  error.  With  false  premises  and 
a  colored  medium,  not  only  one  truth  is  subjectively  trans- 
formed, but  all  its  relations  are  also  distorted  and  colored 
to  correspond.  In  this  way  systems  of  negation  are  built 
up ;  for  with  one  error  for  a  basis,  a  whole  series  must  be 
evolved  to  harmonize  with  it. 


GENERAL   PRINCIPLES.  19 

Natural  Law  is  everywhere.  Its  lines  as  they  permeate 
the  business  world  may  not  be  so  easily  traceable  as  in  ma- 
terial science,  but  the  evidence  of  their  existence  and  rule 
is  no  less  positive  and  unquestionable.  But  their  relations 
are  more  complex.  They  are  so  interlaced  and  mingled  with 
human  or  legislative  law  on  the  one  hand,  and  a  purely 
mental  and  moral  economy  on  the  other,  that  any  study  of 
one  is  impossible,  except  in  its  connection.  They  shade 
into  each  other  so  perfectly  that  no  line  of  demarcation  is 
visible. 

The  general  perception  of  the  uniform  and  universal 
reign  of  law  has  grown  with  the  growth  of  knowledge,  and 
at  the  present  time  the  highest  aim  of  science  is  its  fuller 
discovery  and  interpretation.  Natural  Law  is  but  another 
name  for  the  methods  of  the  Creator ;  and  that  being  ad- 
mitted, it  is  evident  that  all  just  and  wholesome  human 
enactment  must  be  founded  upon  it.  That  this  true  foun- 
dation is  more  generally  recognized  and  built  upon  at  the 
present  time  than  in  any  past  age,  is  obvious ;  and  this  is 
especially  true  where  constitutional  and  democratic  forms 
of  government  prevail.  Human  law  is  the  will  of  society 
in  an  effort  to  interpret  natural  method ;  and  although  it 
may  put  limits  on  individual  will,  it  is  yet  indispensable  to 
human  welfare.  There  has  been  a  steady  improvement  in 
legislation  and  government,  in  proportion  as  Natural  Law 
has  been  understood.  Step  by  step  the  patriarchal,  tribal, 
and  monarchal  forms  of  government  have  played  their  part, 
and  led  up  to  the  modern  republic,  which  is  the  most  whole- 
some framework  of  society  yet  evolved.  Further  improve- 
ment will  follow  in  proportion  as  the  lines  of  Natural  Law 
shall  be  wrought  into  the  warp  and  woof  of  the  social  fabric. 

The  key  to  progress  and  approximate  perfection  in  every 
department,  whether  physical,  mental,  moral,  or  even  spir- 
itual, is  conformity  to  law.  Take  a  few  illustrations :  A 
thorough  observance  of  mental  and  physical  hygienic  law 


20  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

tends  directly  to  healthful  and  normal  individual  develop- 
ment. A  greater  or  less  transgression  brings  a  propor- 
tionate penalty.  The  penalty  must  be  paid  whether  the 
violation  be  knowingly  or  ignorantly  committed.  A  head- 
ache and  nervous  depression  are  very  certain  to  follow  a 
prolonged  drunken  revelry,  but  no  more  so  than  are  panic 
and  business  stagnation  to  come  after  an  era  of  wild  specu- 
lation. That  physical  disease,  the  effect  of  which  is  to 
gradually  thin  the  blood  toward  a  watery  condition,  when 
it  continues  unchecked,  is  no  less  certain  in  its  logical 
results  than  will  be  the  degradation  of  our  monetary  sys- 
tem to  a  silver  or  greenback  basis,  if  at  any  time  a  process  of 
dilution  indefinitely  continues.  Legislation  may  for  a  while 
prevent  the  full  assertion  of  law,  but  it  is  nevertheless  an 
active,  living  force,  unceasingly  pressing  in  the  direction  of 
its  natural  fulfilment.  A  stream  may  be  dammed  on  its 
way  to  the  ocean,  but  the  final  tide-level  of  its  waters  is  not 
a  matter  of  question.  It  would  be  as  reasonable  to  expect 
to  increase  the  efficiency  of  one  blade  of  a  pair  of  shears  by 
the  mutilation  of  its  companion,  as  to  benefit  either  capital 
or  labor  by  an  antagonistic  policy  toward  the  other.  Illus- 
trations might  be  multiplied. 

Some  think  it  practicable  to  transgress  natural  principles 
with  impunity,  so  long  as  they  avoid  the  open  violation  and 
penalty  of  human  legislation;  forgetting  that  the  penalty 
of  the  former  is  the  inevitable  sequence  of  the  transgres- 
sion. One  may  try  to  persuade  himself  that  even  eternal 
principles  are  elastic  and  subject  to  exceptions,  for  the  rea- 
son that  they  sometimes  seem  to  fail  to  assert  their  rule. 
But  if  they  do  not  vindicate  themselves  speedily,  we  may 
be  sure  that  they  are  always  pressing  in  that  direction,  and 
will  never  be  satisfied  till  the  end  is  reached.  We  confine 
Avater  in  a  tube,  but  its  tendency  to  seek  a  level  continues, 
and  no  human  power  can  divest  it  of  this  inclination. 
Natural  Law  is  a  living  force,  persistent,  reliable,  always  in 


GENERAL   PRINCIPLES.  21 

its  place  and  pressing  to  do  its  work.  It  is  this  invariable- 
ness  which  enables  us  to  use  it,  and  make  it  serviceable. 
While,  therefore,  it  is  true  that  we  are  always  under  its 
sovereignty,  it  is  no  less  a  fact  that  when  we  comply  with 
its  conditions,  it  becomes  our  most  valuable  and  indispen- 
sable co-worker.  Its  powerful  aid,  like  that  of  steam  or 
electricity,  is  always  in  waiting,  only  we  must  not  dictate 
its  methods  of  operation.  We  make  mistakes,  and  our  lines 
of  action  are  often  inharmonious  and  contrary,  while  the 
operations  of  Natural  Law  are  consistent  and  harmonious. 
Its  different  factors  may  modify,  or  counteract,  but  never 
oppose  each  other,  for  truth  cannot  be  in  opposition  to 
truth.  Its  only  warfare  is  with  error,  and  its  complete 
victory  is  simply  a  question  of  time. 


SUPPLY  AND   DEMAND. 


"  Every  natural  force  which  we  call  a  law  is  itself  invisible  —  the 
idea  of  it  in  the  mind  arising  by  way  of  necessary  iiiference  out  of  an 
observed  order  of  facts.'''' 

The  Duke  of  Argyll. 


"  All  are  needed  by  each  one ; 
Nothing  is  fair  or  good  alone.'''' 


Emerson. 


*'  Extremes  in  nature  equal  ends  produce  ; 
In  man  they  join  to  some  mysterious  use.'''' 


Pope. 


"  The  wings  of  time  are  black  and  white, 
Pied  with  morning  and  with  night. 
Mountain  tall  and  ocean  deep 
Trembling  balance  duly  keep. 
In  changing  moon,  in  tidal  wave, 
Glows  the  feud  of  Want  and  Have.'''' 


E.MER80N. 


n. 

SUPPLY   AND  DEMAND. 

Supply  is  positive,  and  demand  negative.  All  negatives 
are  seeking  for  satisfaction  and  completeness  in  their  cor- 
responding positives.  Evil  is  a  demand  for  good,  disorder 
for  order,  and  darkness  for  light.  Ugliness  seeks  beauty ; 
weakness,  strength;  and  hunger,  food.  All  positives  are 
waiting  to  bestow  themselves.  These  two  principles  never 
rest  easily  until  united.  Each  will  wander  to  the  end  of  the 
earth  to  find  compensation  in  its  counterpart. 

The  law  of  supply  and  demand  is  perhaps  the  most 
general  and  fundamental  of  all  the  brotherhood  of  natural 
laws,  and  we  have  direct  relations  with  it  at  all  times  and 
under  all  circumstances.  It  lies  at  the  foundation  of  all 
modern  commerce,  civilization,  invention,  and  science.  It 
has  been  the  main-spring  in  every  transaction,  trade,  and 
exchange,  back  to  the  time  when  man  existed  under  the 
most  primitive  conditions.  It  was  the  basis  of  the  first 
exchanges  of  flint  arrow-heads  and  skins  among  savage  and 
barbarous  tribes,  as  it  also  is  of  all  the  multiform  currents 
and  counter-currents  of  modern  economic  life.  Its  force 
cannot  be  measured.  Its  pressure  impels  mankind  to  work 
its  behests,  in  gathering,  transporting,  and  exchanging  the 
products  of  the  globe,  in  order  that  these  two  principles 
may  meet  and  find  satisfaction.  Men  will  penetrate  to  the 
heart  of  tropical  Africa,  or  the  frigid  regions  of  the  Arctic 
zone ;  they  will  dive  to  the  bottom  of  the  sea,  or  delve  in 
the  bowels  of  the  earth,  to  bring  forth  all  the  complex 
materials  of  supply,  in  order  to  meet  the  grand  aggregate  of 

25 


26  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

universal  demand.  No  enterprise  is  too  venturesome,  no 
effort  too  daring. 

Supply  and  demand  are  like  the  halves  of  a  sphere, 
neither  being  complete  without  the  other,  and  each  waiting 
for  the  other,  as  necessary  to  produce  roundness  and  perfec- 
tion. Throughout  the  whole  cosmic  economy  each  of  these 
factors  is  not  only  incomplete  without  the  other,  but  each 
is  evidence  of  the  existence  of  the  other.  Even  in  the 
spiritual  world,  universal  analogy  teaches  that  as  man  was 
created  with  a  natural  desire  or  demand  for  future  exist- 
ence, that  this  demand  will  be  satisfied.  Demand  was  cre- 
ated for  supply,  and  supply  for  demand,  and  they  have  an 
unerring  affinity  for  each  other,  A  vacuum  is  a  demand 
for  air,  and  cold  for  heat.  Man's  natural  constitution  has 
many  demands,  and  all  these  are  easily  supplied  when  it  is 
in  a  normal  condition. 

Applying  these  principles  more  specifically,  let  us  for 
illustration  take  the  problem  of  furnishing  the  food  supplies 
of  a  great  city  like  London  or  New  York.  We  find  that 
just  the  required  amount  and  variety  are  forthcoming  from 
every  quarter  of  the  globe,  and  all  without  any  system,  de- 
sign, or  forethought.  The  Chinaman  is  gathering  the  tea, 
the  Brazilian  the  coffee,  the  Dakota  farmer  is  raising  the 
wheat,  and  every  other  quarter  and  country  of  the  globe 
are  striving  to  make  up  the  supply  to  fit  this  never  ending 
demand.  It  does  this  as  perfectly  as  if  it  were  regulated 
by  a  pair  of  colossal  balances.  The  element  of  price  comes 
in  and  smooths  off  the  inequalities,  so  that  the  two  surfaces 
come  together  perfectly  as  though  polished  for  the  purpose. 
If  a  temporary,  or  even  exj^ected,  surplus  of  any  article  oc- 
curs, the  price  drops  just  enough  to  increase  the  demand  to 
the  point  of  perfect  equilibrium.  If  there  be  a  temporary 
or  foreseen  future  deficiency,  the  price  rises,  and  the  inevi- 
table equilibrium  is  restored  as  before.  It  is  the  element 
of  price  which  always  determines  the  point  at  which  the 


SUPPLY  AND  DEMAND.  27 

equilibrium  is  reached,  and  price  is  modified  by  still  another 
element,  which  is  competition.  In  the  event  of  a  tendency 
toward  excess,  competition  takes  place  among  sellers ;  and, 
on  the  other  hand,  a  predominance  of  demand  causes  com- 
petition among  buyers.  All  commercial  transactions  and 
prices,  not  only  of  material  products,  but  of  everything 
that  has  value,  like  rates  of  interest,  rents,  salaries,  brain- 
work,  as  well  as  that  of  muscle,  are  so  regulated.  The 
salary  of  the  clergyman,  the  fees  of  the  lawyer,  and  rates 
of  transportation,  as  well  as  wages  for  manual  labor,  are  all 
controlled  by  this  law.  Great  talent  brings  a  high  price 
because  of  its  scarcity.  Price  is  a  relative  quantity,  and  not 
an  abstract  amount.  Competition  among  buyers  may  cause 
strawberries  to  bring  a  dollar  a  quart  in  April,  and  among 
sellers  may  bring  them  down  to  ten  cents  in  June.  They 
were  relatively  as  cheap  at  the  one  time  as  the  other,  the 
price  at  which  supply  and  demand  became  equal  varying 
by  so  much  in  the  different  months. 

These  laws  are  elastic  and  beneficent ;  and  they  adapt 
themselves  to  all  conditions  in  a  natural  and  easy  way,  if 
allowed  to  operate  without  interference.  Not  that  they 
will  do  away  with  all  the  ills  of  society,  or  give  to  every 
man  employment  at  good  wages,  or  always  give  success  in 
business ;  for  all  such  drawbacks  are  incidental  to  human 
fallibility  and  imperfection.  The  effect,  however,  of  an  at- 
tempt to  put  any  forced  or  artificial  laws  in  their  place,  is  to 
increase  tenfold  the  friction  and  difficulty.  Such  an  effort 
always  reacts,  and  is  harmful  to  those  who  mistakenly  hope 
for  benefit.  Let  us  adduce  a  few  illustrations.  Legislative 
interference  in  trying  to  fix  rates  of  interest  —  or  rather, 
one  might  say,  in  trying  to  take  away  the  freedom  of  indi- 
vidual contract  —  in  the  different  States,  is  now  generally 
admitted  to  be  worse  than  useless,  although  years  ago  it  was 
regarded  as  necessary.  The  effort  to  substitute  artificial 
rates  for  natural  ones,  under  penalty,  not  only  did  not  ac- 


28  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

complish  the  purpose  intended,  but  actually  made  interest 
dearer,  by  obstructing  supplies,  injuring  confidence,  and  by 
natural  reaction.  When  the  peculiar  conditions  in  any 
State  make  money  worth  really  more  than  the  maximum 
legal  rate,  the  practical  rate  is  still  further  enhanced,  to 
equal  the  risk  of  the  penalty  which  the  lender  incurs.  Both 
parties  also  feel  that  they  do  no  moral  wrong  by  evading  a 
statute  which  interferes  with  the  first  principles  of  personal 
freedom.  So  generally  does  this  view  of  the  case  now  pre- 
vail, that  this  form  of  legislative  interference  with  Natural 
Law  is  practically  a  dead  letter,  although  in  some  States  the 
ill-advised  statutes  are  nominally  still  in  force.  Legislative 
interference  —  except  to  enforce  impartiality — with  rates 
of  transportation,  and  with  passenger,  telegraph,  and  tele- 
phone service,  is  in  the  same  line,  and  will,  in  the  long  run, 
be  found  to  produce  similar  results.  Aside  from  legislative 
enactment  (which  will  be  considered  more  fully  in  the  chap- 
ter on  Economic  Legislation),  the  most  formidable  attempts 
to  force  artificial  prices  occur  in  the  cases  of  railway  pools 
or  combinations,  speculative  corners  in  food  products  and 
coal,  and  in  labor  unions.  The  results  of  these  efforts  are 
in  the  main  unsuccessful,  and  in  any  case  but  temporary, 
and,  of  course,  they  lack  the  moral  dignity  of  legislative 
interference.  In  the  case  of  railway  combinations,  statistics 
show  that  in  all  instances  where  pool  rates  were  put  at  a 
point  much  above  that  which  may  be  regarded  as  normal, 
they  were  very  short-lived.  Such  a  variety  of  disintegrating 
and  competitive  influences  come  in,  that  even  the  most  bind- 
ing agreements  to  maintain  artificial  rates  soon  have  to  yield. 
In  the  case  of  speculative  combinations  and  corners,  or 
efforts  to  control  market  prices,  it  may  be  admitted  that  in 
a  few  instances  they  have  been  apparently  successful,  but 
in  a  vastly  greater  number  they  have  not  succeeded,  and 
often  have  ruined  their  projectors.  In  the  successful  cases, 
where  one  clique  of  operators  has  succeeded  in  cornering  the 


SUPPLY   AND   DEHIAND.  29 

market,  or  in  establishing  artificial  prices,  it  has  only  been 
in  consequence  of  another  clique  selling  for  future  delivery 
what  it  did  not  possess  —  in  common  parlance  of  the  com- 
mercial world  called  "  selling  short,"  —  which  is  in  itself  an 
abnormal  condition.  Any  effort  to  artificially  advance  prices 
against  natural  consumption  alone  is  rarely  attempted,  for 
to  have  any  chance  of  success  there  must  be  the  opposing 
clique  of  "  short  sellers,"  or  those  who  are  trying  to  artificially 
depress  the  market.  Even  with  the  large  amount  of  "  short 
selling,"  attempts  to  corner  the  market  for  food  products  are 
becoming  more  and  more  infrequent,  owing  to  the  increased 
rapidity  of  transportation,  which  has  a  strong  equalizing 
tendency.  Wherever  such  combinations  have  temporarily 
succeeded,  the  result  has  been  brought  about  by  peculiar 
conditions,  and  in  a  forcible  manner,  before  Natural  Law 
had  time  to  assert  itself.  It  was  like  lifting  a  heavy  weight 
in  spite  of  gravitation. 

There  is  much  popular  misapprehension  regarding  the 
power  which  can  be  exerted  by  "  combines  "  to  change  nat- 
ural tendencies.  We  often  see  newspaper  headlines  like  the 
following :  "  The  West  is  holding  back  its  grain ;  "  or,  "  Chi- 
cago speculators  are  trying  to  force  up  the  foreign  markets ; " 
or,  "  W^all  Street  has  combined  to  get  up  a  boom ; "  and  many 
other  similar  announcements.  The  idea  that  the  millions  of 
farmers  in  the  West,  or  that  the  thousands  of  operators  in 
Chicago  or  Wall  Street,  could  come  to  any  general  under- 
standing in  regard  to  a  uniform  policy  is  absurd.  Instead 
of  any  such  condition  of  unity  ever  existing,  there  are  al- 
ways two  parties,  known  in  common  parlance  as  "  bulls  " 
and  "  bears,"  each  of  which  is  a  balance  to  the  other,  like 
the  two  elements  under  consideration.  The  bears  represent 
the  principle  of  supply,  and  the  bulls  that  of  demand ;  and, 
as  elsewhere,  the  higher  or  lower  prices  determine  the  point 
of  equilibrium  between  them.  So  far  from  combination, 
not  only  each  party,  but  every  individual,  is  trying  to  excel 


30  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

all  others  in  making  the  most  correct  estimate  of  the  nat- 
ural drift  and  tendency  of  existing  conditions,  and  how  to 
profit  thereby. 

Of  forced  artificial  prices  for  labor  by  labor  unions,  we 
shall  refer  more  fully  in  another  chapter,  but  in  passing 
will  suggest  that  the  uniform  dominion  of  these  principles 
is  not  suspended  in  the  regulation  of  labor  values,  as  some 
theorists  maintain.  In  the  long  run  the  value  of  the  labor 
of  any  one  is  determined  by  its  relative  excellency.  If  arti- 
ficially forced  up  by  combination  or  coercion  it  will  soon 
react.  No  matter  how  much  we  might  wish  it  otherwise, 
facts  are  in  opposition.  Not  only  that,  but  upon  closer 
study  we  shall  find  that  the  laboring  man  is  as  much  con- 
cerned in  the  integrity  of  these  laws,  even  if  he  had  the 
power  to  modify  them,  as  any  other  part  of  society.  As  we 
have  before  noticed,  the  prices  of  brain  labor  are  regulated 
by  these  two  elements,  and  it  would  be  a  violation  of  all 
analogy  to  claim  special  exception  in  the  case  of  muscle. 
He  who  tries  to  sow  the  seeds  of  discontent  in  the  minds 
of  laboring  men  by  teaching  such  a  theory,  is  not  their  true 
friend.  He  may  be  actuated  by  an  honest,  though  misguided 
sympathy,  but  it  is  none  the  less  harmful  to  the  laborer,  and 
tends  directly  to  degrade  his  manliness  and  lessen  his  prod- 
uct. The  sentimentalists  who  expect  the  laboring  man  will 
be  benefited  by  force  of  combination  —  as  though  he  were 
going  into  a  combat  —  are  mistaken.  Societies  of  laboring 
men  might  be  organized  for  social,  intellectual,  and  moral 
purposes,  and  be  productive  of  great  good ;  but  when,  as  at 
present,  they  are  constituted  for  the  sole  purpose  of  forcing 
artificial  prices,  they  injure  not  only  the  laborer  himself, 
but  they  are  harmful  to  business  and  confidence,  and  are 
detrimental  to  society  at  large.  A  seller  of  labor,  as  of  any 
thing  else,  is  dependent  on  demand;  and  demand  cannot 
be  coerced.  Whenever  that  is  attempted,  it  shrinks  back. 
It  is  like  picking  a  quarrel  with  the  only  friend  who  can 


SUPPLY   AND   DEIVIAND.  31 

help  us.  Supply  cannot  afford  to  repel  and  diminish  de- 
mand. It  would  be  a  poor  way  to  induce  a  horse  to  drink, 
to  force  his  head  under  water. 

Demand  can  be  stimulated,  courted,  and  increased  by 
the  adoption  of  such  a  policy  as  will  promote  peaceful  con- 
ditions, and  inspire  confidence,  for  the  present  and  the 
future.  Wages  then  rise  naturally  from  increased  demand. 
Under  such  conditions,  every  employer  enlarges  his  capa- 
city, and  as  a  buyer  of  labor  has  to  offer  higher  prices  to  get 
it.  The  almost  or  quite  one  hundred  per  cent  advance  in 
average  wages  which  has  been  made  during  the  last  thirty 
years,  in  spite  of  the  immense  immigration  into  the  country, 
is  a  natural  advance,  and  was  caused  by  an  excess  of  de- 
mand. If  the  forcing  process  had  been  continually  applied 
during  that  period,  the  advance  would  have  been  much  less 
marked,  for  the  reason  that  the  demand  would  have  been 
injured.  As  we  have  already  seen  that  supply  and  demand, 
after  adjusted  by  price,  are  always  equal,  it  follows  that  an 
injury  to  one  is  harmful  to  both.  It  may  be  objected  that 
in  the  case  of  factory  towns  and  cities,  the  immobility  of 
labor  would  prevent  in  some  degree  the  right  adjustment 
of  wages  by  the  law  of  supply  and  demand.  This  may  be 
true  temporarily ;  but  there  is  no  other  practical  adjustment 
possible,  and  therefore  we  have  no  choice.  However,  the 
practical  immobility  is  never  so  great,  but  that  in  the  event 
of  any  forced  or  continued  attempt  to  impose  artificially 
low  prices  upon  labor  by  employers,  a  gradual  but  sure  pro- 
cess of  recovery  will  begin  at  once,  and  not  stop  until  the 
normal  rate  is  approximated.  The  emigration  from  such  a 
factory  or  town  may  be  gradual,  but  it  will  be  continuous, 
until  the  inevitable  equilibrium  is  reached.  It  is  no  com- 
pliment to  the  intelligence  and  manliness  of  laboring  men 
to  assert  to  the  contrary.  The  real  self-interest  of  the  em- 
ployer is  also  a  powerful  factor,  for  the  emigration  would  be 
from  his  most  intelligent  and  desirable  class  of  help. 


32  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

In  general,  demand  has  grown  from  the  cravings  of  prim- 
itive man  for  simple  food  and  shelter,  and  these  of  the 
crudest  character,  up  to  the  infinite  and  wonderfully  com- 
plex variety  of  desire  that  characterizes  modern  civilization, 
and  supply  has  paralleled  its  track  for  the  entire  distance. 
This  equal  progress  and  the  enlargement  of  supply  and 
demand  will  continue  in  the  future,  and  no  one  can  fix 
their  limits.  Until  human  character  is  evolved  to  that 
degree  that  unselfishness  becomes  the  unwritten  and  all- 
prevailing  law,  supply  and  demand  will  always  be  kept 
equal  by  the  regulative  adjustment  of  price.  May  the  day 
be  hastened  when  the  higher  law  will  overcome  the  lower, 
and  price  be  a  thing  of  the  past.  But  when  it  appears  it 
will  come  voluntarily,  without  "observation,"  and  for  the 
reason  that  it  is  the  outer  index  of  transformed  and  illu- 
mined character. 


THE  LAW   OF  COMPETITION. 


"  Competition  is  the  life  of  trade.'''' 

^^  Easy  to  match  what  others  do, 

Perform  the  feat  as  well  as  they ; 

Hard  to  out-do  the  brave,  the  true. 

And  find  a  loftier  way.'" 

Emerson. 

"  There  are  geniuses  in  trade,  as  v:ell  as  in  war,  or  the  state,  or 

letters ;  and  the  reason  why  this  or  that  man  is  fortunate,  is  not  to 

be  told.     It  lies  in  the  man.''^ 

Ibid. 

"  What  greatness  has  yet  appeared,  is  beginnings  and  encourage- 
ments to  us  in  this  direction." 

Ibid. 


"  We  must  trust  infinitely  to  the  benificent  necessity  which  shines 

through  all  laws.'''' 

Ibid. 


III. 

THE   LAW   OF  COMPETITION. 

Has  competition  a  normal  place  in  the  realm  of  social 
economics  ?  This  is  a  question  which  recently  has  called 
forth  considerable  discussion,  and  upon  which  opinions  vary 
widely.  In  giving  it  an  affirmative  answer,  we  take  a  dif- 
ferent and  broader  view  than  that  held  by  some  earnest  and 
sincere  philanthropists  for  whom  we  have  great  respect. 
So  far  as  they  are  concerned,  their  practical  benevolent 
spirit  is  not  impaired  by  some  abstract  intellectual  specula- 
tions, as  to  what  is,  and  what  is  not,  the  proper  framework 
for  an  ideal  social  system.  But  with  all  due  appreciation 
of  their  altruism,  the  fact  remains,  that  there  is  a  much 
more  numerous  class  of  illogical  people  who  are  induced  to 
make  impractical,  and  even  harmful  applications  of  such 
speculative  theories. 

In  forming  a  just  estimate  of  any  principle,  it  is  impor- 
tant that  a  proper  discrimination  be  made  between  that 
which  is  considered,  jper  se,  and  its  abuses.  These,  in 
reality,  are  only  the  negations  of  any  system  of  positive 
good.  Instead  of  forming  any  part  of  it,  they  constitute 
the  lack  of  it.  Normal  competition  is  a  natural  law,  and 
being  deeply  implanted  in  the  human  constitution,  it  forms 
an  indispensable  part  of  ethical  economics.  Knavery,  cor- 
ruption, oppression,  and  fraud  do  not  belong  to  it.  They 
are  weak  spots  where  there  is  too  little  of  the  normal  pres- 
ent order.  Average  character  is  not  yet  evolved  up  to  the 
level  of  the  "  system,"  and  therefore  it  is  the  former  which 
is  at  fault.     When  the  unintelligent  laborer  is  assured  that 

35 


36  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

his  ills  are  due  to  the  existing  framework  of  society,  he 
ignores  the  individual  deficiencies  of  himself  and  others, 
which  constitute  the  real  source  of  his  trouble.  He  is 
persuaded  that  a  great  institution,  for  which  he  is  not 
responsible,  is  adverse,  and  hence  he  makes  little  effort  at 
self-improvement,  and  imagines  that  he  has  a  righteous 
quarrel  with  society  in  general. 

To  compete,  as  defined  by  Webster,  is  "to  contend,  as 
rivals  for  a  prize ;  to  strive  emulously."  To  be  competent, 
is  *'  to  answer  all  requirements ;  having  adequate  power  or 
right ;  fitted ;  qualified  ;  to  be  suiRcient  for."  The  normal 
use  of  the  term  does  not  necessarily  imply  unfriendliness  or 
antagonism.  There  is  wholesome  competition  in  heroism, 
self-sacrifice,  liberality,  excellence  of  production,  and  in 
high  ideals  and  aspirations.  He  who,  in  any  position,  is 
eminent,  is  competent,  or,  in  reality,  a  successful  competitor. 
To  speak  of  competition  in  error,  crime,  or  cruelty,  is  an 
abuse,  or  negative  application  of  the  principle.  Some  sen- 
timental writers  have  rated  it  as  the  antithesis  of  co-opera- 
tion. It  is  rather  a  stimulating  and  necessary  element  of 
co-operation,  for  there  is  competition  among  the  most  earnest 
co-operators.  Who  will  co-operate  the  most  and  best  ?  Evi- 
dently the  successful  competitor.  Not  because  he  is  un- 
friendly, but  relatively  more  competent.  Competition  and 
co-operation  are  the  two  hemispheres  of  one  globe.  They 
each  have  a  necessary  function  in  the  unitary  system  of  the 
Whole. 

The  old  adage  that  '•  competition  is  the  life  of  trade,"  is 
well  founded.  In  the  business  world,  it  consists  either  in 
giving  a  better  article  at  the  same  price,  or  as  good  a  one 
for  less.  He  who  does  these  things  successfully  carries  out 
the  principle,  and  proves  himself  competent.  The  incom- 
petent falls  behind  in  the  competitive  test,  and  his  usefulness 
to  the  community  of  which  he  is  a  part  is  therefore  much 
less.     Competition  between  two  gas  companies  may  give  a 


THE   LAW   OF   COMPETITION.  37 

whole  city  better  and  cheaper  light.  Though  the  more  in- 
competent of  the  two  will  suffer  somewhat,  a  thousand-fold 
more  persons  receive  the  benefit.  Take,  for  illustration,  a 
dozen  leading  retail  dry-goods  houses  in  any  large  city.  A 
stirring  competition  among  them  gives  perhaps  half  a 
million  of  people  better  goods,  lower  prices,  a  greater  variety, 
and  more  attentive  service.  It  provides  for  the  return  of 
goods  when  unsatisfactory,  guarantees  quality,  and  allows 
exchanges.  Each  makes  an  effort  to  attract  patronage  and 
to  secure  a  reputation  for  reliability  and  liberal  treatment. 
If  six  of  the  dozen,  which  are  the  most  incompetent,  suffer 
somewhat  in  the  race,  it  is  for  the  benefit  of  the  half  million. 
Many  of  this  great  community  are  poor,  and  the  inevitable 
rivalry  works  greatly  to  their  advantage.  It  is  a  partial 
sacrifice  of  the  few  for  benefit  to  the  many.  It  is  deplorable 
that  competition  sometimes  causes  seamstresses  to  live  in 
garrets  and  make  shirts  at  starvation  prices ;  but  it  should 
not  be  forgotten  that  for  each  one  of  these,  a  hundred  poor 
people,  as  a  consequence,  buy  their  shirts  cheaply.  Again, 
were  most  of  these  shirt-makers  to  put  aside  an  unfounded 
and  foolish  fancy  as  to  relative  social  status,  they  could  go 
to  domestic  service,  where  competition  among  buyers  always 
insures  not  only  good  wages,  but  good  homes. 

Perhaps  the  most  extreme  instance  of  successful  competi- 
tion may  be  found  in  that  great  organization  known  as  the 
Standard  Oil  Company.  By  its  rare  combination  of  skill, 
capital,  and  executive  ability,  it  has  driven  a  hundred,  more 
or  less,  competing  companies  out  of  the  business  of  refining 
petroleum.  These  non-competents  suffer  —  though  as  a 
rule  they  have  sold  their  plants  to  their  gigantic  competitor 
at  good  prices  —  but,  as  a  consequence,  sixty  millions  of 
people  get  better  and  cheaper  light.  There  are  a  hundred 
thousand  consumers  of  kerosene  where  there  is  one  refiner. 
Regarding  the  company  just  cited  as  illustrating  the  power 
of  Natural  Law,  we  are  not  defending,  or  even  considering, 


38  TnE  POLITICAL  ECONOMY  OF  HUMANISM. 

in  this  connection,  the  morality  of  its  various  specific  trans- 
actions. If  that  has  been  defective,  it  is  not  the  fault  of 
our  social  system,  but  of  private  delinquency  and  the  laxity 
of  our  legal  tribunals. 

Competition  is  not  limited  to  individuals  and  corporations, 
but  its  quickening  impulse  is  felt  by  states  and  nations. 
Wherever  it  is  most  prevalent  and  intense,  there  the  prog- 
ress of  science,  invention,  and  civilization  is  the  most  rapid. 

Any  effort,  in  the  business  world,  to  excel  in  giving  less, 
a  poorer  quality,  or  at  a  higher  price  —  in  short,  to  render 
an  inferior  service  —  is  not  competition.  Such  an  effort 
would  be  only  its  absence,  which  might  well  be  denominated 
tw-competition. 

The  sentimental  prejudice  existing  against  this  universal 
law  is  the  result  of  a  narrow  view  of  a  single  element  in  it, 
as  seen  disconnected  from  its  relations.  It  is  mainly  in- 
dulged in  by  those  who  are  unaware  that  law  pervades  the 
economic  realm,  but  are  of  the  opinion  that  it  is  governed 
by  sentiment  and  impulse. 

Were  it  not  for  the  ever-present  stimulus  of  the  desire 
to  excel,  we  might  still  be  travelling  in  clumsy  wagons  with- 
out springs,  instead  of  the  ''  limited  express."  We  would 
still  navigate  the  sea  in  "  caravels  "  —  if  not  by  means  of 
even  cruder  craft  —  unmindful  of  present  luxury  and  speed, 
which  make  distant  nations  like  next-door  neighbors. 

China  has  made  little  progress  in  art,  science,  and  in- 
vention for  thousands  of  years,  from  the  almost  utter  dearth 
of  emulation  among  its  people.  Barbarous  tribes  emerge 
from  savagery,  ignorance,  and  poverty,  only  as  rapidly 
as  competition  becomes  mingled  with,  and  added  to  co- 
operation. An  Indian  tribe  has  the  latter  in  high  degree, 
but  as  the  former  is  wanting  there  is  little  individual  prog- 
ress. Co-operation  alone,  keeps  all  upon  the  same  level. 
Each  is  satisfied  with  the  methods  and  attainments  of  his 
ancestors  and  neighbors.     Competitive  energy  has  evolved 


THE   LAW   OF   COMPETITION.  39 

the  whole  fabric  of  modern  civilization.  A  watch  could  as 
well  run  without  a  mainspring,  as  the  world  make  progress 
with  this  universal  tonic  wanting.  But  a  sickly  and  senti- 
mental paternalism  sees  competition  as  a  principle  which  is 
inimical  to  the  interests  of  the  "  laboring  man."  Is  such  a 
man  disconnected  from,  and  an  exception  to,  all  the  rest  of 
humanity  ?  One  would  so  conclude,  for  his  champions  often 
assume  that  his  welfare  lies  in  direct  opposition  to  that  of 
the  rest  of  society.  But  the  fact  is  that  competition  is  his 
best  friend.  It  impels  him  toward  the  very  industry,  merit, 
and  progress  which  his  self-imposed  leaders  and  guardians 
discourage.  The  desire  to  excel  in  the  laboring  man  is  the 
great  lever  to  lift  him  higher.  But  for  that  he  would  for- 
ever delve  on  the  low  plane  of  mediocrity.  It  prompts  and 
spurs  him  to  better  service  and  higher  attainment.  It  up- 
lifts, not  merely  by  pushing  from  behind,  but  through  ideals 
from  above.  Its  motto  is  ever.  Excelsior !  Every  one  who 
is  competent,  and  competing,  gives  the  world  his  co-opera- 
tion by  raising  the  general  average. 

The  term  "  laboring  man  "  has  been  mistakenly  limited 
in  its  popular  significance,  so  as  only  to  include  those  who 
labor  in  a  particular  way.  The  law  of  labor  is  both  uni- 
versal and  beneficent ;  and  he  who  strives  to  evade  it,  and 
does  not  in  some  way  tvork,  in  and  for  the  world,  will  suifer 
for  its  violation. 

The  disparagement  of  competition  by  labor  unions  is  a 
costly  mistake,  for  it  virtually  puts  a  premium  upon  incom- 
petency. Individual  excellence,  and  an  ambition  to  rise 
above  the  dead  level  of  other  incompetents,  meets  with 
thinly  disguised  disapprobation.  A  most  baseless  and  mis- 
chievous theory  has  attained  wide  acceptance,  that,  in  the 
process  of  rising,  one  necessarily  pulls  another  down.  The 
exact  opposite  is  true,  for  every  wholesome  example  really 
forms  a  general  ideal  and  stimulus.  Prevailing  fallacies 
directly  lessen  and  deteriorate  product,  while  the  irrepeal- 


40  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

able  law  ever  remains,  that  in  the  long  run  excellence  alone 
confers  value.  The  combined  labor  unions  of  the  world 
cannot  permanently  lift  wages  above  their  natural  value, 
neither  can  the  united  ''trusts"  of  the  world  confer  abnor- 
mal value  that  will  last.  Quality  and  demand  together 
form  the  only  permanent  basis  of  value  in  the  commercial 
world,  and  the  united  force  of  combination  and  legislation 
cannot  render  it  otherwise. 

Were  it  possible  to  do  away  with  the  law  of  competi- 
tion, humanity  would  settle  down  to  a  stagnant  level,  and 
evolution  be  turned  back. 

When,  in  the  future,  mental  and  spiritual  evolution  shall 
have  ushered  in  the  ideal  reign  of  unselfishness  and  altruism, 
there  will  still  be  an  active  competition  in  kindly  deeds  and 
loving  ministry. 


THE  LAW   OF  CO-OPERATION. 


"  In  union  there  is  strength.'''' 

"  United  we  stand,  divided  ice  fall.'''' 


Morris. 


"3/e)i  will  live  and  communicate,  and  plough,  and  reap,  and 
govern,  as  by  added  etherial  power,  when  once  they  are  united  ;  as  in 
a  celebrated  experiment,  by  expiration  and  respiration  exactly  to- 
gether, four  persons  lift  a  heavy  man  from  the  ground  by  the  little 
finger  only,  and  loithout  a  sense  of  weight.  But  this  union  must  be 
inicard,  and  not  one  of  covenants,  and  is  to  be  reached  by  a  reverse 
of  the  methods  they  use.  The  union  is  only  perfect  when  all  the 
members  are  isolated.     It  must  be  ideal  in  actual  individualism.'''' 

Emerson. 

"-4  long  pull,  a  strong  pull,  and  a  pull  all  together,'''' 


IV. 

THE   LAW   OF   CO-OPERATIOK 

In  tlie  preceding  chapter  the  fact  was  noted  that  the 
laws  of  competition  and  co-operation  supplement,  but  do 
not  antagonize  each  other.  Either,  taken,  alone,  is  frag- 
mentary and  incomplete.  Like  supply  and  demand,  each 
rounds  out  its  counterpart.  They  are  therefore  friendly, 
both  being  indispensable  in  the  normal  Whole. 

Every  orderly  commercial  transaction  includes  the  co- 
operative principle.  Though  one  may  be  a  buyer  and  the 
other  a  seller  the  action  is  concurrent.  The  true  co-opera- 
tive spirit  in  commerce  presupposes  that  both  parties  are 
benefited.  A  farmer  exchanges  a  load  of  potatoes  for  a 
coat.  His  need  and  that  of  the  clothier  are  both  supplied, 
and  the  trade  is  co-operation.  Commerce  always  implies 
both  competition  and  co-operation.  It  is  not  true  that  in 
business  transactions,  one  is  naturally  a  loser  and  the  other 
a  gainer.  Both  should  gain.  Where  it  is  otherwise,  the 
fault  is  not  in  commerce,  law,  or  system,  but  in  individual 
judgment  or  integrity.  If  one  is  cheated,  there  is  a  lack  of 
co-operation.  There  is  also  a  want  of  competition,  for  if 
this  element  be  fully  present  it  is  a  protection  against  loss, 
or  a  "  poor  bargain."  In  every  normal  commercial  transac- 
tion both  parties  are  co-operators  and  also  gainers,  because 
surrounding  competition  furnishes  a  kind  of  guaranty  that 
neither  shall  lose.  Viewed  in  itself,  then,  the  present 
economic  order,  with  all  its  inherent  laws,  is  beneficent. 
Commerce,  per  se,  is  altruistic.  All  possible  failure  must 
therefore  find  its  location  in  individual  character. 

43 


44  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

Co-operation  as  usually  defined  is  "  concurrent  effort,  or 
labor;  operating  jointly  with  another."  It  is  a  vmiversal 
and  indispensable  law  in  man's  social  constitution,  and  in 
the  world  of  economics.  "In  union  there  is  strength," 
Without  this  principle  no  notable  human  accomplishment 
would  be  possible.  Every  great  edifice,  city,  railroad,  or 
manufactory  comes  into  existence  through  adaptive  and 
general  co-operation.  Even  the  simplest  human  product 
embodies  the  co-operative  principle.  A  needle  bears  silent 
witness  to  the  existence  of  a  great  factory  Avhere  there  is 
found  a  variety  of  concurrent  effort  employed  for  a  single 
end.  A  great  artist  would  be  helpless  without  the  co-opera- 
tive skill  of  the  manufacturer  of  pigments,  concerning  the 
production  of  which  he  may  know  nothing.  The  principle 
is  so  complex  and  silent  in  its  operations  that  we  are  largely 
unconscious  of  its  ubiquity. 

Co-operation  lies  so  deeply  imbedded  in  the  human  con- 
stitution that  it  may  be  called  an  instinct.  It  is  therefore 
common  to  all  the  inferior  planes  of  life.  A  swarm  of  bees 
furnishes  a  good  illustration.  Below  the  level  of  humanity 
each  co-operative  circle  is  naturally  confined  to  those  of  the 
same  species.  The  co-operation  of  the  bee  does  not  extend 
beyond  bees,  or,  perhaps,  is  still  further  limited  to  its  own 
swarm.  Animal  co-operation  imiformly  has  narrow  limits. 
When,  in  the  ascending  trend  of  organized  life,  man  is 
reached,  the  principle  broadens,  and  its  normal  and  ideal 
position  as  a  law  begins  to  be  realized.  In  proportion  as 
animality  is  slowly  but  surely  overcome,  co-operation  will 
continue  to  widen  its  scope  until  it  becomes  in  action  what 
it  now  is  ideally  —  all-comprehensive. 

It  is  undeniable  that  from  a  superficial  standpoint,  co- 
operation has  a  more  attractive  and  unselfish  aspect  than 
competition.  But  a  deeper  view  shows  that  limited  co-opera- 
tion usually  has  a  basis  of  self-interest,  if  not  of  selfishness. 
As  popularly  defined,  its  application  is  always  restricted. 


THE   LAW   OF   CO-OPERATION.  45 

We  co-operate  with  those  of  oxlt  own  union,  sect,  secret 
society,  or  political  party.  But  what  of  all  the  rest  of  man- 
kind ?  If  a  man  does  not  belong  to  our  union,  he  is  a 
"  scab  ; "  if  not  to  our  party,  he  is  a  "  demagogue."  If  we 
live  in  Colorado,  Eastern  people  are  "  gold  bugs,"  or,  if  in 
New  York,  those  of  the  West  are  "  silver  lunatics."  Not 
only  co-operation,  but  the  true  co-operative  spirit  is  held 
under  restriction.  Just  in  proportion  that  such  is  the  case, 
it  becomes  selfish  and  antagonistic.  Limited  co-operation 
really  means  co-operation's  negation,  or  absence,  and  thus 
it  entirely  fails  to  fulfil  its  ideal  function.  Prevailing  co- 
operation is  still  that  of  the  animal  plane.  Until  limita- 
tions are  outgrown  it  will  be  only  elementary.  Education 
comes  through  an  adverse  experience  among  partial  nega- 
tions and  rudiments. 

But  all  limited  forms  of  co-operative  effort  are  by  no 
means  to  be  condemned  or  discouraged.  They  are  abuses 
only  to  that  degree  that  they  embody  a  spirit  of  antagonism 
toward  the  rest  of  society.  An  organized  body  of  carpenters 
whose  mutual  aim  and  interest  is  to  develop  moral  and 
intellectual  fibre  among  its  members,  to  provide  for  their 
social  recreation  and  enjoyment,  to  succor  them  when  in 
distress  and  to  stimulate  technical  and  mechanical  skill  — 
all  these  embrace  the  true  co-operative  principle,  though 
limited  in  scope.  Such  elements  are  positive  and  their 
limitations  are  only  superficial.  Their  spirit  overflows 
the  boundaries  of  their  visible  application.  Unions  that 
operate  upon  such  lines  are  working  in  harmony  with  broad 
co-operative  law.  But  when  such  aims  are  set  aside,  and  an 
unfriendly  spirit  developed  towards  those  of  the  same  trade 
who,  in  the  exercise  of  individual  freedom,  do  not  belong  to 
our  union,  there  is  a  want  of  true  co-operation.  When  such 
a  temper  becomes  ruling  and  those  of  other,  or  no  unions, 
are  abused  or  threatened,  it  is  purely  animal  co-operation, 
which  is  organized  selfishness. 


46  THE  POLITICAL  ECONOMY  OF  HTTMANISM. 

A  co-operation,  though  limited  to  those  of  the  same  pro- 
fession, trade,  or  calling,  which  seeks  to  increase  its  efficiency 
in  service  to  the  greater  unit  —  society  at  large  —  is  proper 
and  laudable.  The  carpenter  must  not  narrow  his  view  of 
the  carpenter's  interest  entirely  to  his  own  trade,  because 
his  real  interest  is  a  part  of,  and  bound  up  in  the  general 
interest.  The  larger  is  more  important  than  the  smaller, 
and  the  whole  than  any  one  of  its  parts.  This  truth,  though 
so  fundamental,  finds  but  little  lodgement  in  the  popular 
mind.  Society,  instead  of  being  a  great  co-operative,  har- 
monious One,  is  split  into  warring  fragments.  It  should  be 
like  a  grand  orchestra  where  many  dissimilar  instruments 
co-operate  for  the  elaboration  of  one  supreme  theme.  Sup- 
pose that  the  violins  co-operate  alone,  what  becomes  of  the 
symphony  ?  But  some  theoretical  socialist  will  suggest 
that  the  orchestral  illustration  is  quite  in  the  line  of  his 
own  philosophy.  Let  us  see.  Could  the  enactment  of  the 
best  musical  legislation,  and  a  proclamation  of  all  the  laws 
of  harmony  to  the  united  orchestra,  enable  it  to  interpret 
one  of  Beethoven's  immortal  productions  ?  No,  there  must 
be  a  preparatory  individual  education,  and  an  inner  inspi- 
ration, and  only  when  these  have  formed  the  basis,  is  an 
orderly  and  harmonious  expression  possible.  The  music 
must  flow  forth  in  vibrations  from  within.  It  cannot  be 
artificially  imposed  from  without.  All  true  unity  comes 
from  a  drawing  towards  a  common  centre,  and  not  from  ex- 
ternal binding  or  hooping.  If  true  co-operation  could  be 
inaugurated  by  legislative  enactment,  a  single  day  would 
suffice  for  the  accomplishment  of  a  great  evolutionary  age- 
long process. 

The  human  body,  in  its  normal  condition,  is  an  ideal 
illustration  of  the  co-operative  principle.  The  body  is  one. 
No  single  set  of  members  organize  a  union  against  the 
others.     Concurrent  effort  is  not  limited  to  those  having 


THE   LAW    OF    CO-OPERATION.  47 

a  like  office,  but  embraces  the  most  distant  and  unlike. 
Though  some  appear  less  important,  yet  all  are  needed  and 
honorable.  Paul  delineated  this  beautiful  relation  not  only 
religiously  but  scientifically. 

But  a  necessary  and  expected  antagonism  between  the 
various  members  of  the  body-politic  is  everywhere  assumed. 
Conventional  literature,  the  daily  press,  common  habits  of 
thought,  and  general  consent,  all  combine  to  create  and  em- 
phasize a  universal  disagreement.  It  is  everywhere  taken 
for  granted  that  the  interests  of  different  sections  are  inimi- 
cal to  each  other.  That  of  the  farmer  is  against  that  of  the 
manufacturer,  that  of  the  importer  opposed  to  that  of  the 
exporter,  and,  more  than  all,  that  of  the  poor  contrary  to 
that  of  the  rich.  Class  prejudice,  which  can  only  aggravate 
existing  evils,  is  systematically  stimulated.  Ignorant  and 
fanatical  self-constituted  leaders  build  up  a  fallacious  polit- 
ical economy,  and  gain  a  cheap  notoriety  by  arousing  section 
against  section  and  class  against  class.  Trades,  profes- 
sions, unions,  parties,  and  societies  are  led  to  believe, 
in  all  sincerity,  that  their  interest  is  peculiar,  and  dis- 
connected from  the  common  interest.  Friction  is  every- 
where increased,  prosperity  blighted,  and  confidence  de- 
stroyed. 

Paul's  illustration  of  co-operative  activity  among  the 
bodily  members  holds  equally  good  in  the  business  world. 
The  law  is  immutable,  and  seeming  temporary  and  super- 
ficial exceptions  do  not  in  the  least  invalidate  its  deep, 
silent  trend.  They  are  only  eddies  on  the  bosom  of  a  great 
river. 

Law,  complied  with,  brings  harmony,  and  harmony  in- 
troduces prosperity.  Amid  all  the  jarring  contentions  of 
various  "  interests,"  the  unrepealable  principle  remains 
that  no  "  member "  can  more  than  temporarily  suffer  or 
rejoice  hy  itself.     The  rule  holds  good  when  extended  to 


48  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

nations.     Any  seeming  advantage  to  one,  gained  through 
the  misfortune  of  another,  is  only  superficial. 

In  the  economic  world  all  parties  and  transactions  have 
real  though  invisible  relations;  but  only  in  proportion  as 
these  are  permeated  Avith  a  gemiine  co-operative  spirit,  will 
harmony  and  prosperity  prevail. 


LABOR   AND   PRODUCTION. 


He  that  by  the  plough  would  thrive 
Himself  must  either  hold  or  drive.^^ 


■  Man  goeth  forth  unto  his  work  and  to  his  labor  until  the  evening." 

Ps.   civ.  23. 


"  On  bravely  through  the  sunshine  and  the  showers, 
Time  hath  his  %i3ork  to  do  and  ice  have  ours.^'' 

Emebsok. 

"  Jf  all  the  year  were  playing  holidays, 
To  sport  would  be  as  tedious  as  to  work.'''' 

King  Henky  IV. 


"  Hear  ye  not  the  hum 
Of  mighty  workings  ?  " 


Keats. 


'■^  Human  labor,  through  all  its  forms,  from  the  sharpening  of  a 
stake  to  the  construction  of  a  city  or  an  epic,  is  one  immense  illustra- 
tion of  the  perfect  compensation  of  the  universe.''^ 


Emerson. 


V. 

LABOR  AND  PRODUCTION. 

Labor  is  normal;  idleness,  abnormal.  The  physical, 
mental,  and  moral  faculties  of  man  were  created  for  use, 
and  it  is  only  by  their  active  training  that  they  attain  skill 
and  excellence.  That  the  active  employment  of  the  gifts 
and  capabilities  of  man's  nature  was  designed  by  the  Creator 
is  proved  abundantly,  both  by  analogy  and  experience.  As 
all  human  happiness  and  perfection  are  reached  by  con- 
formity to  law,  so  a  non-conformity  brings  misery  and 
unhappiness.  Labor  is  a  blessing,  and  idleness  a  curse. 
Human  powers  must  have  occupation,  else  they  become 
withered  and  inharmonious.  As  man  is  constituted,  it  were 
better  to  give  him  the  barren  and  sterile  soil  bringing  forth 
weeds  and  thistles,  to  be  transformed  by  the  healthful 
activity  of  his  energy  into  blooming  gardens  and  fruitful 
fields,  than  to  supply  him  with  all  these  delightful  and 
useful  objects  without  effort  and  toil  on  his  part. 

The  world  is  full  of  positive  possibilities,  and  honest 
labor  is,  therefore,  the  most  staple  of  all  commodities. 
The  mistake  of  thinking  that  only  manual  labor  is  labor 
is  a  very  common  one,  while  the  fact  is  that  every  power 
of  the  body  and  mind  requires  exercise ;  and  only  by  this 
activity  can  they  fulfil  their  offices.  Under  primitive  con- 
ditions, there  was  a  general  activity  of  body  and  mind, 
rather  than  special  development  in  any  one  direction.  The 
barbarian  was  his  own  tailor,  carpenter,  jeweller,  farmer, 
and  common  carrier  ;  and  his  products  were  few  and  poor. 
Under  modern  conditions,  activity  is  greatly  subdivided, 

51 


52  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

and  education  much  more  thorough.  Thus  Ave  have  farm- 
ers, carpenters,  painters,  engravers,  masons,  and  numberless 
other  craftsmen,  each  one  of  whom  has  a  special  technical 
training,  and,  as  a  result,  decided  superiority.  Each,  there- 
fore, does  not  only  his  own  particular  kind  of  work  for 
himself,  but  for  all  the  others,  because  his  production  is  far 
more  perfect.  So  in  the  department  of  mental  labor :  the 
clergyman,  lawyer,  banker,  scientist,  historian,  and  states- 
man —  all  cultivate  their  powers  in  their  several  fields  to  a 
high  state  of  efficiency ;  and  each  has  his  place  in  rounding 
out  and  completing  the  grand  unit  called  society.  In  this 
consists  the  great  superiority  of  the  modern  state,  with  its 
high  degree  of  specialized  education,  over  the  barbarous 
governments  and  peoples  of  primitive  conditions. 

The  scientist,  historian,  and  bookkeeper  are  as  truly 
laborers  and  producers  as  are  they  who  handle  a  pick, 
plough,  or  loom.  The  popular  use  of  the  term  "  labor  "  as 
applied  only  to  those  who  exercise  muscle  is  erroneous. 
The  brakeman  in  the  employ  of  a  railway  company,  by 
industry,  energy,  and  ability,  may  rise  to  be  its  president, 
but  he  is  no  less  a  laborer  than  before,  and  as  a  man  not 
necessarily  any  more  worthy  or  noble. 

While  a  normal  amount  of  labor  is  in  accord  with  law, 
and  is  necessary  to  healthful  and  harmonious  development, 
an  excess  of  exertion  is  harmful.  It  is  also  obvious  to  any 
close  observer  that,  of  the  two,  undue  mental  effort  is  more 
wearing  in  its  results  on  the  health  and  constitution  than 
too  much  physical  exertion.  The  care  and  responsibility 
incidental  to  mental  occupations  cause  many  to  break  down 
in  health ;  and  here  again  the  popular  idea  is  at  fault  that 
connects  all  hardship  and  suffering  only  with  manual  occu- 
pations. While,  therefore,  our  sympathy  goes  out  towards 
the  laborer  who  uses  a  shovel  for  eight  or  ten  hours  in  a 
day,  we  should  not  entirely  overlook  the  weary  bookkeeper 
or  clerk,  who  often  works  much  longer  amidst  unwholesome 


LABOR   AND   PRODUCTION.  63 

conditions  and  impure  air.  The  sleep  of  the  man  who 
exercises  muscle  is  sweeter,  his  digestion  more  sure,  and  his 
vigor  greater  than  that  of  the  average  mental  laborer.  The 
idea  that  manual  labor  is  in  itself  degrading,  and  to  be 
avoided  so  far  as  possible,  is  the  delusion  of  the  present 
time. 

The  ideal  man  is  he  whose  physical,  mental,  and  moral 
powers  are  all  cultivated  and  harmoniously  balanced.  Idle- 
ness is  a  violation  of  natural  law,  and  its  companions  in 
transgression  are  improvidence,  degradation,  intemperance, 
and  decay.  By  inexorable  law  and  logic  each  positive 
virtue  has  its  corresponding  negative  condition  of  vice  and 
error. 

As  to  the  different  varieties  of  labor,  all  are  indispensa- 
ble, the  mental  as  well  as  the  physical,  each  in  its  proper 
sphere.  The  steam  in  the  locomotive  is  a  more  subtle 
and  immaterial  factor  than  the  boiler  and  wheels,  but  no 
less  necessary  and  important.  So  the  mental  worker,  though 
in  a  more  refined  and  nominally  higher  sphere,  is  only  a 
component  part  of  a  general  system,  and  in  personality  is 
not  necessarily  above  his  fellow  laborer.  The  test  of  the 
excellency  of  a  wheel  in  a  machine  is  that  it  fills  well  its 
peculiar  place  and  office. 

Having  found  that  work  is  natural,  necessary,  and  in 
harmony  with  man's  constitution,  let  us  consider  its  object. 
In  the  economy  of  Natural  Law,  means  are  always  in  order 
to  ends.  Labor  is  the  means  ;  production  the  object.  The 
finished  building  is  as  much  the  product  of  the  architect  as 
of  the  carpenter  or  mason ;  or,  rather,  it  is  the  joint  prod- 
uct of  all.  In  the  distinction  made  between  mental  and 
manual  labor,  it  is  evident  that  only  the  predominant  ele- 
ment is  referred  to,  for  neither  can  be  strictly  pure.  The 
simplest  manual  task  must  be  accompanied  by  a  mental 
process;  and  likewise,  the  scholar  or  scientist  must  do 
some  physical  labor  with  pen  or  apparatus. 


54  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

Production  is  only  a  general  term  for  food,  clothing, 
home,  education,  surplus.  These  constitute  wealth,  which  is 
only  another  name  for  accumulated  labor.  The  wages  paid  for 
labor  are  rather  the  above-named  objects,  than  any  certain 
sum  of  money,  for  the  value  of  money  consists  only  in  the 
products  that  it  will  command.  The  natural  aim  of  the 
laborer  is  to  increase  the  result  produced  by  his  effort. 
How  can  this  be  done  ?  First,  subjectively,  by  greater 
activity  and  through  the  cultivation  of  individual  qualities 
which  tend  to  success.  Second,  by  surrounding  himself 
with  more  favorable  environment  and  conditions.  It  is 
not  only  in  accord  with  Natural  Law,  but  also  with  common 
sense,  that  individual  energy  and  thorough  training  in  a 
particular  department  are  necessary  for  much  progress  in 
that  line  of  effort.  The  question  with  the  wage-worker 
should  not  be,  how  few  hours  or  how  little  exertion  can  I 
possibly  get  along  with  ?  but  rather,  how  much  can  I  accom- 
plish? He  who  puts  forth  his  best  efforts  will  soon  be- 
come indispensable  to  his  employer,  and  his  labor  will 
naturally  increase  in  value,  and  he  himself  by  positive  de- 
velopment will  become  an  employer. 

Society  is  composed  of  two  classes,  the  independent  and 
the  dependent.  To  which  of  these  two  classes  a  man  will 
belong  is,  under  all  ordinary  conditions,  a  matter  of  indi- 
vidual choice.  The  terms  independent  and  dependent  are 
here  used  in  a  relative  and  not  absolute  sense.  There  is  no 
absolute  independence,  for  interdependence  is  universal. 
But  relatively,  every  one  who  mingles  faithfulness  with  his 
labor  and  keeps  his  expenditures  within  his  receipts,  is 
economically  independent.  This  is  true  without  much  re- 
gard to  the  amount  of  difference,  provided  the  margin  be 
on  the  side  of  thrift.  It  is  true  that  the  situation  of  a  wage- 
laborer  is  sometimes  subject  to  contingencies,  but  vrith.  rare 
and  local  exceptions,  conscientious  labor  is  always  in  de- 
mand.    The  higher  it  becomes  in  quality,  the  more  scarce 


LABOR   AND   PRODUCTION.  55 

it  grows  in  quantity.  The  high  grade  is  never  plentiful, 
hence  demand  meets  it  on  an  elevated  level,  both  as  to 
value  and  stability.  The  highway  to  independence  is  open, 
and  guide-boards  are  up  at  every  turn.  Just  here  is  seen 
one  of  the  bad  effects  on  the  laborer  of  actual  —  not  ideal 
—  labor  unions.  A  member,  instead  of  depending  upon  in- 
dividual merit  and  energy  for  maintaining  or  advancing  his 
wages,  relies  upon  the  power  of  the  union.  The  former  is 
natural,  the  latter  artificial.  By  this  course  he  loses  his 
motive  for  the  attainment  of  personal  superiority  and  nat- 
ural advancement,  and  settles  down  to  the  dead  level  of  the 
dependent  elements  which  surround  and  control  him. 

The  goal  of  the  American  laborer  is  the  position  of 
accumulated  labor,  or,  in  other  words,  that  of  proprietor. 
A  continuous,  even  if  small  margin  between  income  and 
expenditure  in  one  direction,  fixes  the  condition  of  indepen- 
dence, and,  in  the  other,  of  its  necessary  opposite.  It  is  not 
a  matter  of  chance,  but  of  law.  In  this  country,  even  if  a 
laborer  begins  in  the  dependent  ranks,  his  condition  is  not 
a  fixed  one.  The  transition  to  the  independent  class  is  easy 
and  plain,  when  the  natural  course  of  individual  merit  and 
effort  is  chosen.  Examples  on  every  hand  prove  that  this 
is  a  universal  experience,  and  not  a  matter  of  sentiment  or 
theory.  But  a  very  small  part  of  the  wealth  of  this  coun- 
try was  inherited,  probably  nine-tenths  being  the  result  of 
personal  enterprise.  Any  short-cut  route  to  success  is 
uncertain,  and  any  forced  march,  outside  of  the  natural  con- 
ditions of  progress,  or  under  a  dictator,  is  generally  disas- 
trous. But  the  broad,  direct,  and  solid  highway  of  individual 
industry,  economy,  and  temperance  is  open  always.  A  sur- 
plus is  what  the  daily  wage-worker  should  be  accumulating, 
and  presently  it  supplements  his  personal  force  with  power 
of  another  kind.  For  such  a  man  to  try  to  antagonize  ac- 
cumulated labor,  or  those  who  possess  it,  is  to  oppose  the 
very  principles  and  conditions  which  are  his  own  hope  and 
reward. 


56  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

The  youug  American  wage-worker  who  puts  forth  his 
best  efforts,  and  who  practises  what  economists  call  absti- 
nence, or  the  limiting  of  expenditure  to  less  than  income, 
has  as  good  ground  for  expecting  to  become  a  capitalist  as 
has  the  gardener  to  expect  a  crop  from  good  seed  deposited 
in  rich  and  fertile  soil.  It  is  no  less  true  that  he  who  does 
as  little  as  will  possibly  keep  him  in  his  position,  and  who 
has  slight  regard  for  the  interests  of  his  employer,  has  the 
elements  in  him  which  make  it  almost  certain  that  he  will 
be  always  a  member  of  the  dependent  class. 

In  regard  to  means  favorable  to  increased  production  by 
labor  which  are  external  to  the  laborer,  two  general  condi- 
tions may  be  mentioned :  first,  that  of  increasing  the  effi- 
ciency of  mechanical  appliances  and  aids ;  and  second, 
seeking  a  favorable  location  or  propitious  field  for  operations. 
As  to  the  first,  it  is  not  long  ago  when  labor-saving  machines 
were  looked  upon  as  the  enemy  of  the  laboring  man,  and 
some  of  the  most  useful  inventions  were  forcibly  destroyed, 
and  their  owners  persecuted.  Even  so  recently  as  thirty  or 
forty  years  ago,  the  opinion  was  quite  prevalent  in  the  rural 
districts  of  New  England  that  the  general  advent  of  rail- 
roads would  quite  destroy  the  value  of  horses  and  oats.  It 
was  found  later  that  the  world  needed  both,  and  the  result 
was  just  the  opposite  of  what  the  farmers  had  expected. 

When  the  printing  press  was  first  brought  into  use,  it 
was  found  that  with  it  one  man  could  do  the  work  of  two 
hundred  copyists,  and,  as  a  consequence,  it  was  feared  that 
one  hundred  and  ninety-nine  men  would  be  thrown  out  of 
employment.  But  what  was  the  result  ?  Soon  the  superi- 
ority of  printed  over  written  books,  together  with  the  lower 
price,  stimulated  authorship  and  increased  the  sale  and  use 
of  books  a  thousand-fold,  and  employment  was  given  to 
more  printers  than  there  were  copyists  before.  Besides  this 
direct  result,  there  were  in  addition  the  related  occupations 
of   paper-makers,   book-binders,   book-sellers,  and    various 


LABOR   AND  PRODUCTION.  57 

others,  so  that  the  final  outcome  was  the  demand  for  many- 
times  the  number  of  persons  who  seemingly  lost  their  occu- 
pation Avhen  the  invention  came  into  practical  use.  And 
this,  as  the  result  merely  of  an  economic  process,  aside 
from  the  immense  impetus  given  by  it  to  learning,  art,  and 
science.  It  may  be  regarded  as  in  accord  Avith  Natural  Law 
that  every  new  invention  and  improvement  which  saves 
manual  labor,  and  adds  to  the  comfort  and  convenience  of 
mankind,  at  the  same  time  increases  and  opens  up  new 
avenues  of  employment,  so  that,  as  in  the  instance  just 
noted,  it  gives  occupation  to  a  greater  number  of  operatives 
than  were  before  required.  This  may  require  time,  but  the 
process  is  steady  and  sure.  Every  improved  appliance  not 
only  increases  production  and  adds  to  the  varieties  of  occu- 
pation, but  it  also  raises  the  grade  of  employment.  The  en- 
gineer who  runs  a  locomotive  has  a  higher  quality  of  occupa- 
tion than  he  who  wields  a  pick,  for  the  reason  that  it  includes 
more  of  the  intellectual  element.  The  superiority  is  in  the 
relative  grade  of  production,  for  the  man  who  uses  the  pick 
is  not  necessarily  lower  or  less  honorable  as  a  man. 

In  general,  with  the  progress  of  science  and  invention, 
mind  has  more  and  more  asserted  its  supremacy  over  mat- 
ter, and  the  physical  exertion  of  the  laborer  has  been  tem- 
pered in  an  increasing  degree  with  the  intellectual  element. 
An  ever  increasing  proportion  of  the  aggregate  work  of  the 
world  is  of  the  mental  variety.  As  man  becomes  better 
acquainted  with  I^atural  Law,  he  gains  in  his  supremacy 
over,  and  command  of  the  material  elements  around  him, 
and  makes  them  minister  to  his  complex  needs  and  desires. 
All  this  is  to  the  special  advantage  and  benefit  of  the  man- 
ual laborer.  In  consequence  of  this,  the  humble  cottager 
of  to-day  has  more  comfort  and  even  luxury  than  the  king 
in  his  palace  could  have  enjoyed  three  hundred  years  ago. 
It  is  said  that  Queen  Elizabeth  wore  the  first  pair  of  knit 
hose  ever  brought  to  England,  and  they  were  regarded  as  a 


58  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

great  luxury ;  while  now  even  a  beggar  could  hardly  be 
found  without  them.  The  introduction  and  use  of  the  tele- 
graph, telephone,  and  other  electrical  appliances  afford  ex- 
amples of  the  conveniences  now  enjoyed  by  all  classes. 
These,  at  the  same  time,  open  up  immense  fields  and  new 
avenues  for  human  energy  and  employment.  As  before 
suggested,  labor  becomes  more  efficient  in  production  by 
subdivision.  The  Jack-at-all-trades  quality  of  production 
belongs  to  a  past  age ;  the  present  tendency  being  towards 
perfection  of  detail,  by  means  of  thorough  organization  and 
subdivision. 

The  law  of  progress  is  in  the  line  of  each  member  of 
society  doing  the  particular  thing  which  he  can  do  best, 
and  leaving  everything  else  alone.  This  natural  principle 
is  being  widely  utilized,  and,  as  a  result,  no  past  age  can 
be  compared  with  the  present  in  respect  to  the  ease,  quan- 
tity, and  quality  of  production. 

Our  own  country,  without  doubt,  presents  a  field  of  oper- 
ation where  the  greatest  possible  production  can  be  gained 
from  a  given  amount  of  labor.  The  American  youth  have 
before  them  the  most  promising  opportunities  which  have 
ever  been  enjoyed  in  any  age  or  country.  They  are  in- 
debted for  this,  not  only  to  the  fact  that  they  have  the 
command  of  all  the  accumulated  skill,  knowledge,  and  ex- 
perience of  their  predecessors,  but  that  all  their  natural 
rights  and  privileges  are  secured  to  them  by  the  beneficent 
care  and  protection  of  free  government.  They  start  in  the 
race  without  any  of  the  impediments  that  pertain  to  less 
democratic  conditions.  In  the  Old  World,  the  fixedness  of 
class,  rank,  and  position,  together  with  its  systems  of  entail, 
compulsory  military  service,  and  many  other  influences 
which  are  artificial  in  their  character,  are  dead-weights, 
and  in  opposition  to  the  free  exercise  of  Natural  Law. 


COMBINATIONS   OF  CAPITAL. 


"  Where  large  management  is  more  economical  and  productive 
than  small  management,  we  shall  find  large  concerns  or  none  at  all. 
Business,  even  in  those  lines  ivhere  there  is  partial  monopoly,  is  car- 
ried on  loith  too  narrow  a  margin  of  profit  to  endure  any  but  the  most 
economical  methods.     To  control  the  abtises  tvithout  destroying  the 

industries  is  a  matter  of  the  utmost  difficulty.'''' 

A.T.  Hadley. 

"  A  dispassionate  view  of  the  subject  will,  in  my  opinion,  convince 
a  competent  person  that  the  general  economic  function  of  a  corpora- 
tion is  to  perform  steadily,  cheaply,  and  permanently,  a  service 
which  an  individual  can  only  j^etform  briefiy,  and  with  comparative 

inefficiency." 

C.  S.  Ashley. 

"  Thus  is  the  problem  of  Rich  and  Poor  to  be  solved.  The  laivs  of 
accumulation  ii'ill  be  left  free  ;  the  laws  of  distribution  free.  Indi- 
vidualism will  continue,  but  the  millionnaire  will  be  but  a  trustee  for 
the  poor ;  intrusted  for  a  season  with  a  great  part  of  the  increased 
wealth  of  the  community,  but  administering  it  for  the  community  far 
better  than  it  could  or  would  have  done  for  itself.  The  best  minds 
will  thus  have  reached  a  stage  in  the  development  of  the  race  in  which 
it  is  clearly  seen  that  there  is  no  mode  of  disposing  of  surplus  ivealth 
creditable  to  thoughtful  and  earnest  men  into  lohose  hands  it  fiows, 
save  by  using  it  yearby  year  for  the  general  good.     This  day  already 

dawns." 

Andrew  Carnegie. 


VI. 

COMBINATIONS   OF  CAPITAL. 

The  conditions  of  to-day  aiford  opportunities  and  induce- 
ments for  the  combination  of  capital  unparalleled  by  any 
past  era,  and  yet,  equalizing  forces  have  grown  powerful  in 
a  corresponding  proportion.  Corporations  are  by  far  the 
most  common  forms  of  capitalistic  combination ;  but  as  they 
are  considered  in  another  chapter  the  present  study  will  be 
given  more  especially  to  those  modern  commercial  phenom- 
ena, popularly  known  as  trusts  and  corners.  The  former 
are  usually  concerned  in  the  manufacture  of  product,  as  well 
as  its  disposal,  and  the  latter  more  exclusively  in  the  ma- 
nipulation of  market  values.  Railroad  consolidations,  which 
are  essentially  great  combinations  of  capital,  are  also  noticed 
elsewhere. 

It  is  not  easy  to  consider  the  conventional  trust  or  corner 
from  a  single  stand-point.  There  is  the  ethical,  which  is 
somewhat  distinct  from  the  economic  view.  These  shade 
into  each  other  in  indefinable  degrees,  but  are  not  identical. 
While  the  working  of  natural  economic  law  is  mainly  con- 
sidered, its  ethical  relations  are  intimate  and  should  not  be 
overlooked. 

Not  only  from  a  humanitarian  but  from  a  purely  moral 
stand-point,  all  combinations  which  make  an  effort,  whether 
or  not  successful,  to  force  abnormal  values,  deserve  condem- 
nation and  that  only.  The  writer  desires  to  emphasize  this 
conviction  because,  while  he  attempts  to  show  that  they  are 
"  cabin'd,  cribb'd,  confined,"  by  Natural  Law,  and  have  not 
a  tithe  of  the  harmful  power  —  except  to  those  who  invest 

61 


62  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

in  them  —  that  theorists  have  credited  them  -with,  at  the 
same  time  he  utterly  denies  any  supposed  defence  of,  or 
excuse  for  them.  Let  us  regard  the  question  as  settled  that 
all  attempts  to  impose  artilicial  prices  for  products  are 
morally  delinquent,  even  when  technically  legal  as  tested  by 
legislation.  The  immorality  is  in  the  intention,  whether  it 
be  wholly  or  partially  successful,  or  an  entire  failure.  But 
in  any  case  where  a  trust  or  combination  is  formed  for  the 
purpose  of  greater  economy,  or  cheaper  production,  and  with 
the  aim  of  selling  its  product  at  fair  and  not  abnormal  value, 
it  has  good  reason  for  existence  and  is  ethically  sound. 

There  is  perhaps  no  economic  topic  upon  which  there  has 
been  more  unintelligent  and  superficial  reasoning  than  upon 
combinations  of  capital.  Theorists,  including  many  clergy- 
men, with  good  intentions,  but  ignorant  of  the  practical  laws 
of  business,  have  vastly  overrated  the  power  of  combined 
capital. 

Let  us  try  to  arrive  at  the  truth,  for  that  cannot  be  un- 
friendly to  labor.  It  is  everywhere  and  always  a  saving 
force.  There  is  nothing  that  more  surely  clouds  it  than  a 
sentimental  pessimism. 

In  a  brief  study  of  combinations  of  capital,  as  related  to 
inherent  social  and  economic  forces,  we  will  begin  with  the 
modern  trust.  Such  combinations  have  been  painted  in 
lurid  colors  as  dangerous  monsters  ;  but  in  reality,  owing  to 
natural  limitations,  no  one  but  the  stockholder  need  fear 
them.  He  is  the  victim  of  flaming  prospectuses,  unsound 
principles,  and  of  an  inordinate  ambition  to  gain  by  a 
"short  cut."  The  adverse  experience  of  thousands,  who 
have  imagined  that  combination  could  override  such  an 
antique  law  as  supply  and  demand,  is  very  uniform.  Many 
excellent  financiers,  so  considered,  have  utterly  over-esti- 
mated the  power  of  combination,  and  realized  loss  through 
investments  in  trusts,  instead  of  expected  gain. 

But  the  trust  principle  may  be  employed  in  accord  with 


COMBINATIONS   OF   CAPITAL.  63 

Natural  Law  and  the  public  interest.  To  increase  produc- 
tion, cheapen  processes,  and  improve  quality  by  systematic 
consolidation  is  lawful.  A  great  university  is  an  educa- 
tional trust.  Instruction  in  specialties,  scientific  experi- 
ments, and  thorough  research  are  all  more  exhaustive  than 
would  be  possible  in  half  a  dozen  small  disconnected  col- 
leges. Likewise,  factories,  even  though  located  apart,  by 
becoming  a  unit  may  sometimes  introduce  new  economies 
so  as  to  better  serve  society  in  serving  themselves. 

But  with  the  great  majority  of  trusts  now  existing, 
as  well  as  many  which  have  come  to  an  untimely  end, 
the  above  enumerated  objects  are  secondary  or  incidental, 
while  the  supreme  motive  is  to  impose  abnormal  values 
upon  product.  How  many  well-laid  schemes  of  this  kind 
—  schemes  that  looked  so  formidable  as  to  excite  appre- 
hension —  have  dissolved  through  the  working  of  silent  but 
immutable  forces !  Their  collapse,  or  disintegration,  was 
purely  a  question  of  time.  Their  sanguine  projectors,  who 
thought  it  possible  to  raise  a  few  square  miles  of  the  ocean 
above  the  general  level,  have  exchanged  a  financial  loss  for 
an  educational  experience.  A  trust,  even  if  inflated,  may 
run  smoothly  for  a  short  time,  but  presently  some  unlooked- 
for  competition  or  monetary  stringency  dries  out  the  ''water" 
that  gives  it  proportion,  and  it  shrinks  to  its  normal  lean- 
ness. When  the  collapse  comes  the  law  of  reaction  brings 
its  value  down,  temporarily,  nearly  as  much  below  as  it  has 
been  above  the  normal  level. 

It  is  true  that  during  the  recent  era  of  industrial  com- 
bination much  profit  has  been  realized  in  the  organizing 
process  of  trusts.  Suppose  half  a  dozen  factories,  more  or 
less,  engaged  in  the  same  line  of  production,  have  a  normal 
value  of  a  million  of  dollars.  They  are  consolidated  into  a 
trust  and  capitalized  at  three  millions.  If  the  original  pro- 
jectors are  able  to  find  confiding  and  visionary  investors 
who  will  buy  their  stock  at  par,  they  have  made  two  mil- 


64  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

lions.  Such  a  profit  is  immoral  and  in  violation  of  Natural 
Law,  even  though  it  be  technically  ''  legal."  Such  wealth 
is  gained,  not  by  the  operation  of  a  trust,  or  from  the  gen- 
eral public,  but  before  it  fairly  begins  business.  The  loss  is 
that  of  the  investors  and  not  of  the  community.  The  latter 
is  protected  by  natural  limitations.  Consumers  are  safe 
because  the  most  powerful  combination  can  bolster  up  ab- 
normal values  only  temporarily.  Unseen  and  untiring 
forces  are  fighting  against  it.  Demand  falls  off  and  com- 
petitive production  is  stimiilated  on  every  side.  The  market 
is  soon  overstocked,  and  values  go  down  with  such  momentum 
that  they  do  not  stop  until  consumers  have  their  compensa- 
tion, with  interest  added.  A  few  typical  examples  may  be 
of  interest.  In  1888  a  trust,  or  syndicate  as  it  was  popularly 
called,  was  formed,  with  headquarters  in  Paris,  for  the  purpose 
of  gaining  control  of  the  visible  and  future  supply  of  copper, 
and  for  the  manipulation  of  its  market  price.  The  opera- 
tions of  the  great  "French  Copper  Syndicate"  are  almost 
of  dramatic  interest,  not  only  because  they  are  thoroughly 
typical,  but  for  the  reason  that  the  contest  was  the  most 
gigantic  one  in  modern  commercial  history.  On  one  side 
was  unlimited  capital  and  eminent  financial  ability,  while 
arrayed  against  this  combination  were  only  the  silent  and 
unseen  forces  of  Law.  The  principles  involved,  being 
identical  with  those  of  scores  of  lesser  trusts,  a  brief  out- 
line of  the  operations  of  the  famous  syndicate  will  serve 
for  illustration.  When  the  combination  was  first  formed  it 
had  no  ostensible  purpose  of  obtaining  world-wide  control 
of  the  metal  in  question,  but,  after  advancing  to  a  certain 
point,  found  it  necessary  either  to  retreat  at  a  decided  dis- 
advantage, or  go  forward  with  the  purpose  of  gaining  full 
control  of  the  main  bulk  of  the  entire  copper  product. 
Note  the  conditions.  The  field  of  operations  included  but 
a  single  metal,  and  that  one  having  but  limited  sources  of 
supply.      The  resources  of    the  syndicate  were  immense, 


COMBINATIONS   OF   CAPITAL.  65 

including  some  of  the  largest  banking  houses  of  Paris  and 
London,  with  ramifications  extending  to  America  and  else- 
where. The  names  of  financiers  of  world-wide  reputation 
were  prominent  in  the  management.  The  most  extravagant 
expectation  of  profits  was  entertained,  not  only  by  the  pro- 
jectors, but  by  the  commercial  world  in  general.  It  was 
like  a  gladiatorial  contest  between  giants.  The  normal  value 
of  copper  at  the  beginning  was  about  ten  and  a  half  or 
eleven  cents  per  pound.  The  syndicate  began  its  purchases 
quietly,  storing  the  metal  for  a  rise.  It  easily  secured  the 
bulk  of  the  visible  supply,  and  made  contracts  with  pro- 
ducers for  future  product  at  gradually  advancing  prices.  It 
withdrew  the  metal  from  the  open  market  and  went  on  with 
the  accumulation  until  the  expected  high  prices  of  the  future 
should  enable  it  to  realize  great  profits.  It  reasoned  that 
the  world  must  have  copper,  and  would  be  obliged  to  come  to 
them  and  pay  their  prices  for  it.  This  logic  was  satisfac- 
tory to  the  best  (so  supposed)  financiers  of  the  commercial 
world.  Who  should  or  could  arise  to  dispute  its  supremacy  ? 
Not  any  personal  or  corporate  opposition,  but  invisible  forces 
which  are  as  unrepealable  as  the  tides.  The  syndicate 
serenely  paid  for  its  copper  and  laid  it  away  for  the  good 
time  coming.  Month  by  month  the  price  was  advanced. 
By  fractions  it  steadily  moved  from  eleven  to  twelve,  thir- 
teen, fourteen,  fifteen,  sixteen,  and  seventeen  cents  per 
pound.  Copper  mining  everywhere  was  greatly  stimu- 
lated, and  the  output  increased  in  unexpected  degree. 
Consumption  waned,  not  by  any  agreement  among  con- 
sumers, but  because  of  abnormal  prices.  With  each  ad- 
vance less  copper  was  used,  and  wherever  possible  some 
other  metal  substituted.  In  the  meantime  a  mountain  of 
shining  ingots  was  being  piled  up  in  syndicate  warehouses. 
What  should  be  done  with  it  ?  Scores  of  millions  were 
already  invested,  and  still  the  process  was  constantly  accel- 
erating.    The  longer  the  day  of  retribution  was  postponed 


66  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

the  more  intense  would  it  be.  It  came,  and.  down  went  the 
price  and  the  syndicate.  Flood  tide  was  followed  by  ebb  —  a 
very  low  ebb.. 

Natural  Law  punishes  its  offenders  without  the  aid  of 
courts  or  judges.  Every  principle  involved  in  the  operation 
and  collapse  of  the  French  Syndicate  is  alive  and  unceas- 
ingly active  in  every  lesser  attempt  to  override  inherent 
forces.  Even  were  the  entire  wealth  of  a  first-class  nation 
put  into  the  effort,  the  result  would  be  the  same.  "  Supply 
and  demand,"  almost  outlawed  by  modern  theorists,  still 
retains  its  pristine  vigor. 

The  mania  for  trusts  has  been  general  and  suicidal. 
The  insane  desire  for  sudden  wealth  blinds  the  vision  to 
adverse  object  lessons  on  every  hand.  A  "  short  ciit "  to 
affluence  is  the  ignis  fatuus  of  the  modern  business  world. 
There  are  combinations  in  sugar,  cordage,  cotton-seed  oil, 
matches,  biscuit,  strawboard,  and  numerous  other  products. 
The  midsummer  financial  cyclone  of  1893  swept  through 
them  and,  generally  speaking,  left  them  shrunken  and  di- 
lapidated. In  some  cases  they  may  again  gather  a  little 
energy,  but  it  is  evident  that  the  "  vertebral  column  "  of  the 
industrial  trust  mania  is  seriously  fractured.  Panics,  like 
thunder-storms,  purify  the  air. 

A  dry  goods  establishment,  soap  factory,  or  brewery 
cannot  increase  earnings  simply  by  the  magic  of  transfor- 
mation into  a  stock  company  with  an  inflated  capital.  Oftener 
there  is  a  retrograde,  in  consequence  of  less  careful  man- 
agement and  diminished  economy.  However,  a  most  com- 
mendable exception  is  found  when  a  private  enterprise  is 
merged  into  a  stock  company,  at  a  normal  valuation,  for 
the  purpose  of  a  general  participation  of  interest  by  em- 
ployees. 

There  are  a  few  important  combinations  having  peculiar 
features  which  deserve  mention.  Prominent  among  them 
are  the  Sugar  and  Standard  Oil  trusts.     The  former  has 


COMBINATIONS   OF   CAPITAL.  67 

been  nominally  transformed  into  a  single  corporation,  but 
it  still  retains  the  essential  trust  features.  Circumstances 
up  to  the  present  time  have  made  it  more  than  ordinarily 
successful.  While  its  shares  have  been  a  prominent  "  foot- 
ball "  in  the  stock  exchange,  it  has  paid  liberal  dividends, . 
and  just  now  seems  quite  well  established.  What  are 
its  peculiarities  ?  Sugar  refining  is  an  industry,  the  estab- 
lishment of  which  requires  an  unusual  length  of  time  and 
exceptionally  large  capital.  Every  refining  plant,  however, 
that  may  be  built  in  future  will  have  to  be  taken  in  by  the 
combination  on  some  terms,  or  competed  with.  Just  in 
proportion  that  artificial  values  are  imposed  on  product,  the 
projection  of  new  refineries  will  be  induced.  With  unlim- 
ited millions  of  idle  capital  seeking  permanent  investment 
on  a  net  four  per  cent  basis,  enterprise  will  not  be  dormant, 
and  the  public  will  be  increasingly  protected.  There  are 
other  collateral  influences  which  have  given  the  sugar  com- 
bination some  advantage  over  trusts  in  general.  Among 
them  may  be  noted,  eminently  able  and  conservative  man- 
agement and  executive  ability,  and  operation  in  a  product 
of  universal  and  increasing  demand,  together  with  a  less 
excessive  capitalization  in  proportion  to  the  value  of  its 
aggregate  output.  Without  here  considering  the  merits  or 
demerits  of  the  present  tariff,  it  is  evident  that  forced  arti- 
ficial values  of  much  magnitude  would  cause  regulative  im- 
portations. The  prediction  is  ventured  that  in  the  not 
distant  future,  competition  in  sugar-refining  will  so  increase 
that  dividends  will  at  length  be  reduced  to  the  basis  of  a 
fair  return  upon  a  normal  valuation  of  the  combined  plants. 
Natural  Law  will  never  rest  its  forces  until  all  inflation  has 
been  atoned  for  and  rectified. 

What  are  the  peculiar  elements  which  not  only  have 
preserved  the  Standard  Oil  Company  from  disintegration, 
but  given  it  unprecedented  success  ?  Before  attempting 
their  enumeration,  it  may  be  proper  to  suggest,  that  in  this 


68  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

connection,  the  ethical  quality  of  its  specific  transactions 
with  competitors  is  not  considered,  but  only  its  relations 
■with  Natural  Law  and  the  general  public.  Its  strong  points 
as  compared  with  other  trusts  may  be  noted :  (1)  It  deals 
in  a  product  which  in  some  measure  is  a  natural  monopoly. 
Petroleum,  of  any  amount,  is  the  crude  product  of  but  few 
countries  and  localities.  (2)  It  has  stimulated  demand  by 
furnishing  to  the  world  good  goods  at  normal  prices.  (3) 
Great  executive  ability,  extensive  operations,  and  improved 
and  patented  processes  in  production,  all  combine  to  give  it 
cohesion  and  solidity.  It  has  made  itself  a  great  unit,  and, 
unlike  most  other  trusts,  is  not  composed  of  a  number  of 
smaller  units  held  together  by  an  artificial  tie.  But  even 
this  great  modern  phenomenon  of  the  business  world  will 
not  forever  escape  disintegrating  forces.  It  will  be  a  mar- 
vel if  after  the  present  remarkable  executive  management 
shall  have  passed  away,  its  place  can  be  completely  filled. 

There  are  some  other  capitalistic  combinations  which 
from  peculiar  circumstances,  in  various  degrees,  are  natural 
monopolies.  Typical  among  them  may  be  named  anthracite 
coal  combinations,  gas  trusts,  and  the  Western  Union  Tele- 
graph Company.  It  is  at  once  apparent,  that  so  far  as  any 
commodity  or  service  is  exempt  from  general  competition, 
it  is  not  fully  amenable  to  Natural  Law ;  and  yet,  even  in 
such  cases,  the  public  has  much  greater  protection  than  is 
popularly  supposed.  Strange  as  it  may  at  first  seem,  the 
actual  safety-valve  is  the  motive  of  gain.  Take  the  West- 
ern Union  Telegraph  Company.  Though  not  a  natural 
monopoly,  circumstances  have  made  it  a  close  and  complete 
one.  How  can  it  realize  the  largest  profit  ?  Some  would 
say  by  charging  higher  rates  for  service,  but  it  is  probable 
that  such  a  policy  would  result  in  positive  loss.  Demand 
would  at  once  fall  off.  If  present  rates  were  doubled,  many 
who  now  make  every-day  use  of  its  facilities  would  do  so 
but  rarely,  and  only  for  imperative  reasons.     It  is  quite 


COMBINATIONS   OF   CAPITAL.  69 

probable  that  a  reduction  from  present  rates  would  enhance 
profits.  There  is  a  fair  and  normal  value  at  which  supply 
and  demand  meet,  to  the  mutual  advantage  of  producer  and 
consumer.  Even  great  corporations  often  mistake  their 
true  interest,  and  only  learn  by  slow  educational  experience 
that  their  own  advantage  coincides  with  that  of  the  public. 
If  the  price  of  telegraphic  service  were  lowered  one-half, 
only  the  same  plant  and  but  little  more  help  would  be  re- 
quired. The  business  might  increase  fivefold,  and  telegrams 
become  almost  as  common  as  communications  by  mail. 
Doubtless  the  company  would  serve  itself  in  serving  the 
public.  The  working  of  the  same  law  is  seen  in  the  im- 
mense increase  of  railroad  freights,  made  possible  by  rates 
so  low  that  they  would  have  been  pronounced  ruinous  by 
experts  ten  years  ago. 

Those  combinations  popularly  known  as  corners  deserve 
attention  because  their  power  for  harm  is  so  generally  over- 
rated. But  while  the  public  has  little  to  fear  from  them, 
they  are  both  demoralizing  and  disastrous  to  the  great 
majority  of  their  promoters.  Where  one  party  must  lose 
in  order  that  another  may  gain,  the  transaction  is  abnormal. 
Ideal  commerce  presupposes  that  both  parties  are  gainers. 
No  possible  corner  in  any  product  can  more  than  locally 
and  temporarily  affect  the  hone  fide  consumer.  In  a  suc- 
cessful corner  —  which  is  exceptional  —  the  "short  seller" 
is  the  sufferer.  The  ambition  to  ''  control "  some  product, 
and  the  insane  desire  to  acquire  unearned  wealth  quickly, 
lead  many  unscrupulous  business  men  to  forget  the  great 
equalizing  power  of  rapid  transportation,  instantaneous  com- 
munication, and  the  general  forecast  of  future  conditions, 
all  of  which,  more  than  at  any  previous  time,  render  at- 
tempts to  corner  any  product  extra  hazardous.  Speculation 
in  "  futures "  is  the  great  bane  of  the  modern  business 
world;  and  yet  it  is  impracticable  to  legislate  against  it, 
because  genuine  and  speculative  transactions  shade  into  each 


70  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

other  by  indistinguishable  degrees.  Such  legislation  would 
also  impair  the  freedom  of  individual  contract,  which  should 
be  sacredly  preserved.  Here,  as  elsewhere,  a  line  must  be 
drawn  between  a  normal  transaction  and  its  possible  abuses. 
The  simple  fact  that  a  transaction  is  in  a  "  future  "  is,  in 
itself,  no  evidence  that  it  is  artificial  or  even  speculative. 

As  illustrative  of  the  principles  of  a  corner,  let  us  out- 
line a  conventional  one  in  Chicago.  Pork  is  selling  in 
April  for  twelve  dollars  per  barrel.  There  is  a  fair  stock 
on  hand,  and  many  believe  that  in  the  meantime  prices  for 
July  delivery  will  decline  somewhat.  They  are  therefore 
willing  to  sell  the  July  "  future "  for  twelve  dollars,  or 
even  a  little  less,  though  they  may  not  have  a  barrel  on 
hand  at  the  time  of  sale.  They  expect  to  buy  for  less 
before  July,  and  thereby  make  a  profit  at  the  time  of  de- 
livery. These  are  "  short  sellers ; "  and  they  furnish  the 
opportunity  for  a  corner,  and  have  an  equal  responsibil- 
ity for  it.  Another  party  believe  that  natural  conditions 
favor  somewhat  higher  prices,  and  that  by  buying  freely 
they  can  still  more  enhance  them.  They  form  a  syndicate 
to  "run  a  corner."  They  very  quietly  proceed,  through 
their  brokers,  to  buy  up,  not  only  the  real  pork  on  hand, 
but  also  that  "  sold  short,"  or  pork  to  be.  Both  parties 
furnish  guaranty  funds  called  "  margins  "  for  the  faithful 
fulfilment  of  contracts.  The  syndicate  gradually  advance 
the  price  by  their  purchases.  Though  they  may  lose  some- 
thing in  the  end  on  the  actual  pork,  they  expect  to  make 
a  great  deal  more  out  of  the  short  sellers.  They  crowd 
up  the  price  by  fractions  to  fifteen,  sixteen,  and  finally 
to  seventeen  dollars  before  the  end  of  July.  Heavier 
"  margins  "  are  constantly  required.  The  contest  is  wholly 
outside  of  natural  conditions.  The  combination  proceed 
confidently,  and  believe  their  adversaries  are  at  their  mercy. 
During  May,  June,  and  July,  pork,  naturally  worth  twelve 
dollars,  brings  much  more,  and  it  "■  pours  in  "  unexpectedly 


COMBINATIONS   OF   CAPITAL.  71 

from  all  directions.  The  syndicate  must  take  care  of  it, 
for  to  retreat  would  involve  great  loss.  Stocks  in  neigh- 
boring cities  must  be  reckoned  with,  for  they  all  gravitate 
towards  an  inflated  market.  It  is  all  piled  up ;  for  so  long 
as  artificial  prices  are  current,  dealers  and  consumers  in 
the  East  and  Europe  refrain  from  buying.  The  only  mar- 
ket for  the  syndicate  consists  in  the  probable  demand  from 
the  short  sellers  to  fill  their  outstanding  contracts.  The 
operation  becomes  gigantic,  and  all  available  funds  are 
exhausted  in  margins,  and  more  called  for.  Collapse  fol- 
lows, and  pork  falls  five  dollars,  or  thereabouts,  in  a  single 
day.  The  combination  began  with  great  means  and  expec- 
tations, but  miscalculated  silent  forces. 

The  illustrative  supposition  just  outlined  was  substan- 
tially paralleled  by  the  veritable  failure  of  a  real  pork 
corner  in  Chicago  in  the  summer  of  1893.  The  principles 
involved  in  all  corners  being  practically  identical,  one  typi- 
cal case  will  suffice  for  a  class. 

Something  more  than  mere  magnitude  must  be  alleged 
against  combinations  of  capital  to  condemn  them.  The 
difficulty  is  not  with  the  principle  of  combination,  but  in 
the  abuses  and  excrescences  that  come  through  human 
avarice.  The  great  enterprises  which  form  an  important 
part  of  our  complex  civilization  cannot  be  carried  forward 
without  the  herculean  forces  of  combined  capital.  They 
are  an  embodiment  on  a  grand  scale  of  the  law  of  co-opera- 
tion. But  any  combination,  whether  or  not  it  be  called  a 
trust,  cannot  violate  Natural  Law  with  impunity.  If  the 
transgression  be  of  great  magnitude  the  inevitable  punish- 
ment will  be  in  proportion.  Eetribution  is  inherent.  The 
economic,  no  less  than  the  physical  law  of  gravitation  is 
never  suspended.  If  any  combination  lacks  organic  unity 
its  days  are  numbered.  Any  trust  forcing  artificial  values 
soon  galvanizes  into  life  new  and  menacing  competition  on 
all  sides. 


72  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

Trust  combinations  have  been  nearly  or  quite  as  common 
in  England,  Germany,  and  France  as  in  the  United  States. 
So  far  as  they  embody  the  abuses  of  combination  they  are 
the  outcome  of  cupidity  and  ignorance.  The  trust  has 
been  a  popular  and  demagogic  "  bogy,"  but  it  need  not  be 
feared  except  by  the  limited  number  who  dabble  in  its 
stock.  Its  bitter  penalties  are  stored  up  within  its  own 
boundaries.  So  soon  as  moral  and  economic  education 
becomes  more  general,  it  will  be  conceded  that  value  is 
conferred  only  by  inherent  quality,  and  that  combina- 
tions —  whether  of  capital  or  labor  —  are  utterly  incapable 
of  its  creation.  Impersonal  conditions,  and  not  combined 
dictation  or  coercion,  form  the  basis  of  how  much  a  thing  is 
wanted.  Attraction,  repulsion,  and  cohesion  are  as  reg- 
nant in  the  world  of  economics  as  in  that  of  matter. 


COMBINATIONS   OF   LABOR. 


"  Every  rise  of  wages  xohich  one  body  secures  by  mere  exclusive 

combination  represents  a  certain  amount,  sometimes  a  large  amount, 

of  injury  to  the  other  bodies  of  workmen.'''' 

AV.  Stanley  Jevons. 

"  The  highest  form  of  co-operation  is  all-inclusive.^'' 

"  The  truth  shall  make  you  free.'''' 

John  viii.  32. 

"  The  time,  hoioever,  is  past  ichen  the  friends  of  human  improve- 
ment can  look  with  complacency  on  the  attempts  of  small  sections  of 
the  community,  whether  belonging  to  the  laboring  or  any  other  class, 
to  organize  a  separate  class  interest  in  antagonism  to  the  general 

body  of  laborers.^'' 

John  Stuart  Mill. 

"  There  is  a  constant  danger  lest  the  Spirit  of  Association  should 
attempt  to  act  against  Nature  instead  of  acting  with  it.  There  is, 
for  example,  a  Law  —  an  observed  order  of  facts  —  in  respect  to  Man, 
which  the  working  classes  too  often  forget,  but  which  can  neither  be 
violated  nor  neglected  vnth  impunity.  That  Law  is  the  Lavi  of  in- 
equality —  the  various  degrees  in  which  the  gifts  both  of  Body  and  of 
Mind  are  shared  among  men.  This  is  one  of  the  most  fundamental 
facts  of  human  nature.     Nor  is  it  difficult  to  see  how  it  should  be 

also  one  of  the  most  beneficent.'''' 

The  Duke  of  Argyll. 


VII. 

COMBINATIONS   OF  LABOE. 

The  combination  of  labor  is  proper  and  legitimate. 
There  is  a  natural  esprit  de  corps  and  brotherly  interest 
among  those  whose  occupations  and  experiences  are  alike. 
They  feel  the  impulse  of  the  same  wholesome  ambition, 
and  have  similar  obstacles  with  which  to  contend.  Man  is 
a  social  being.  Members  of  the  same  profession  or  handi- 
craft are  naturally  drawn  together,  and  societies  and  leagues 
may  be  formed  for  many  laudable  purposes.  Social  recrea- 
tion and  entertainment  are  indispensable  among  manual 
laborers,  and  congeniality  in  large  measure  belongs  to  those 
of  similar  habits  and  pursuits.  Co-operation  and  fraternal 
interest  in  cases  of  misfortune  or  illness  are  always  noble, 
but  among  comrades  of  the  same  calling  they  have  a  pecul- 
iar beauty  and  propriety.  Organization  is  also  useful  as  a 
regulative  influence  in  outside  relations,  especially  in  nego- 
tiations with  employers  regarding  hours,  privileges,  recrea- 
tions, and  sanitary  supervision.  There  is  great  profit  in 
reading  and  literary  organizations,  lyceums  for  debate, 
societies  for  the  promotion  of  temperance  and  morals  ;  scien- 
tific and  trade  associations  having  for  their  object  the 
increase  of  technical  knowledge  in  the  various  arts  and  pro- 
fessions, —  all  these,  and  others  that  might  be  named,  are 
of  great  advantage  to  working  men. 

But  in  a  study  of  labor  organizations  as  they  exist,  we  are 
reluctantly  forced  to  conclude  that  the  various  commenda- 
ble purposes  above  enumerated  are  largely  lacking,  and  in 
their  place  are  often  installed  various  abuses  of  the  princi- 


76  THE  POLITICAL  ECONOMY  OP  HUMANISM. 

pie  of  association.     While  the  ideal  labor  union  would  be  in 

the  highest  degree  helpful,  the  actual  and  existing  one  is 
permeated  with  fallacious  theories.  It  is  necessary  to  note 
the  short-comings  of  the  combination,  in  order  to  evolve  an 
ideal  therefrom  of  what  it  may  become.  The  very  mis- 
takes of  the  actual  union  have  in  them  an  educational  influ- 
ence which  is  a  prophecy  of  improvement.  There  is  an 
active  evolutionary  tendency  which  makes  itself  felt,  and  is 
even  promoted  by  ferment,  agitation,  and  adverse  experi- 
ment. 

In  noticing  some  mistakes  of  the  conventional  labor 
union  we  do  not  oppose  the  union,  but  suggest  laws  and 
tendencies  which,  if  understood,  Avould  transform  it  from 
what  it  is  to  what  it  should  be.  The  associative  principle  is 
good,  but  its  application  is  at  fault.  Natural  Law,  being 
normal,  is  truthful.  The  plain  facts  are  what  the  laboring 
man  greatly  needs.  His  prejudices  have  been  played  upon 
to  his  own  detriment.  Those  who  stimulate  his  envy  and 
antagonism  are  not  his  real  friends.  They  pose  as  his 
champions,  not  by  showing  him  his  honorable  and  indispen- 
sable place  in  society,  but  by  turning  him  against  his  own 
interest  as  well  as  that  of  the  community.  Their  mistaken, 
though  often  honest  efforts  develop  and  increase  his  depen- 
dency so  that  he  becomes  the  victim  of  a  false  philosophy, 
and  inevitably  realizes  loss,  both  moral  and  pecuniary. 

Let  us,  in  order,  note  some  of  the  fundamental  misap- 
plications of  the  associative  principle. 

First.  Their  spirit  and  temper  are  antagonistic  to  cap- 
ital, or  accumulated  labor. 

Second.  Their  influence  is  against  the  exercise  of 
individual  industry  and  excellence,  and  tends  toward 
dependency. 

Third.  Personal  freedom  of  action  and  contract  is 
surrendered  to  the  control  of  others,  whose  judgment  is 
often  faulty  and  prejudiced. 


COMBINATIONS   OF   LABOR.  77 

Fourth.  They  are  tyrannical  in  their  action  toward  all 
unorganized  laborers. 

Fifth.  Their  logical  tendency  and  influence  are  in  the 
general  direction  of  a  levelling  coercive  socialism. 

Let  us  examine  these  points  in  order,  as  above  men- 
tioned. 

First.  Their  spirit  and  temper  are  antagonistic  to  cap- 
ital, or  accumulated  labor. 

The  idea  of  the  necessary  existence  of  this  sentimental 
enmity  has  been  industriously  promulgated ;  and  this,  com- 
bined with  a  degree  of  jealousy  in  human  natvire  toward 
those  whom  we  imagine  to  be  better  off  than  ourselves,  has 
given  popular  currency  to  this  feeling.  It  has  become  such 
a  habit  to  speak  of  the  "  interest  of  laboi',"  and  the  "  inter- 
est of  capital,"  assuming  that  each  is  opposed  to  the  other, 
that  we  adopt  the  practice  without  thinking  of  its  unreason- 
ableness. There  is  no  natural  antagonism,  because  both 
are  mutual  allies  and  necessary  parts  of  one  unit.  When 
one  suffers,  both  suffer ;  and  when  one  is  prosperous,  both 
are.  There  is  no  more  logic  in  a  quarrel  between  them  than 
there  would  be  between  the  right  hand  and  the  left,  or  be- 
tween two  wheels  of  the  same  machine.  Such  a  conflict  is 
purely  an  invention.  As  well  imagine  a  war  between  brick- 
laying and  commerce,  or  industry  and  banking.  Persons 
may  disagree,  but  occupations,  conditions,  and  truths,  never; 
for  they  are  all  interdependent  parts  of  one  unitary  system. 

There  are  many  leaders,  agitators,  and  politicians  whose 
interests  lie  directly  in  the  line  of  keeping  up  this  harmful 
and  expensive  sentiment.  The  machinery  of  labor  organi- 
zations furnishes  them  with  many  opportunities  to  gratify 
ambition,  love  of  notoriety,  sense  of  power  and  authority, 
and  to  gain  financial  benefit  and  political  capital.  It  is 
not  claimed  that  all  are  influenced  by  such  considerations. 
We  are  discussing  principles,  and  not  men.  No  doubt  some 
are  interested  in  this  work  who  are  conscientious,  and  sin- 


78  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

cerely  feel  that  they  are  really  aiding  "  the  cause  of  labor." 
Here  comes  in  a  principle  before  noted.  With  one  error  for 
a  basis,  a  whole  group  of  erroneous  relations  are  evolved  to 
harmonize  with  it  so  as  to  form  a  system.  Assuming  that 
capital  and  labor  are  enemies,  the  logical  result  would  be 
combination,  offensive  and  defensive,  with  close  ranks,  thor- 
ough discipline,  and  perfect  equipment  for  warfare. 

If  there  were  no  accumulated  capital,  there  would  be  no 
factories,  mills,  railroads,  machinery,  or  wages.  How  can 
capital  be  our  antagonist  when  its  absence  would  throw  us 
back  into  a  state  of  barbarism  ?  Without  it,  every  comfort, 
luxury,  and  improvement  would  be  wanting.  Its  enterprise 
enlarges  every  field  of  operation,  increases  the  demand  for 
labor,  and  enhances  its  market  value. 

The  sentimental  theorists  who  write  on  political  economy 
fail  to  see  that  their  teachings  are  contrary  to  the  founda- 
tion principles  of  economic  science,  for  the  reason  that  their 
business  education  has  been  entirely  theoretical.  It  would 
be  an  interesting  experiment  if  some  of  these  writers  on 
"Labor  Problems"  would  embark  in  real  business.  Let 
one  of  them  take  the  management  of  a  large  manufacturing 
corporation,  another  the  control  of  some  railroad  system, 
and  a  third  assume  the  direction  of  affairs  in  a  large  im- 
porting or  wholesale  house.  If  consistent,  they  would  con- 
duct these  various  enterprises  on  the  sentimental  basis.  In 
hiring  help,  they  would  not  be  governed  by  the  market 
price  of  labor,  but  pay  inefficient  men  the  same  as  those  of 
the  best  grade  ;  or  rather,  perhaps,  the  price  should  be  fixed 
by  the  local  "  district  organization."  They  would  pay  ten 
hours'  wages  for  eight  hours'  work,  and  employ  none  but 
union  men,  even  if  others  were  starving.  The  mercantile 
house  would  handle  nothing  but  union  goods,  even  if  just 
as  good  non-union  articles  could  be  had  for  ten  per  cent 
less.  The  railroad  manager  would  have  no  rolling-stock 
that  was  not  made   bv  unionists ;    and  if  his    switchmen 


COMBINATIONS   OF   LABOR.  79 

struck,  he  would  not  hire  other  good  men  who  might  apply 
for  work  at  the  market  price.  He  would  grant  the  terms 
asked  by  the  strikers,  and  take  them  back,  even  if  he  knew 
that  they  would  strike  again  the  next  day.  If  he  wished  to 
change  rules,  hours,  or  methods,  he  would  first  get  permis- 
sion from  the  nearest  "member  of  the  executive  board," 
whether  or  not  that  official  knew  anything  of  the  nature  of 
the  business ;  and  his  negotiations  would  be  entirely  with 
this  official,  and  not  with  the  men.  It  is  very  probable  that 
in  each  of  the  supposed  cases  a  year's  trial  of  sentimental 
management  would  thoroughly  satisfy  the  respective  stock- 
holders in  regard  to  its  merits,  as  compared  with  real  busi- 
ness methods.  Doubtless  it  would  also  satisfy  employees, 
as  the  various  enterprises  would  probably  have  to  suspend, 
and  they  lose  their  places.  It  is  one  thing  to  assume  busi- 
ness conditions  suited  to  a  theoretical  treatise,  and  quite 
another  to  act  under  those  conditions  in  real  life.  The 
cases  supposed  would  be  only  putting  in  practice  the  every- 
day claims  and  theories  of  labor  organizations.  Suppose 
that  the  commerce  of  cities  and  nations  were  conducted  on 
such  a  basis  as  an  experiment.  We  can  imagine  that  it 
would  not  continue  long  before  both  laborer  and  employer 
would  cry  out  for  another  Adam  Smith  to  lead  them  back 
from  chaos  to  the  solid  ground  of  natural  principles. 

The  prejudice  of  the  wage-worker  is  inflamed  until  he 
feels  that  it  is  necessary  to  go  into  a  strong  combination 
for  his  own  protection.  Capital  is  personified  to  him  as 
an  unscrupulous,  overbearing,  and  rich  opponent,  who  is 
doing  his  utmost  to  crush  and  degrade  him,  and  with  such 
an  impression  his  antagonism  is  naturally  aroused.  Thus 
the  interests  of  all  parties  suffer. 

Second.  The  influence  of  existing  labor  combinations  is 
against  the  exercise  of  individual  industry  and  excellence, 
and  tends  toward  dependency. 

It  is  self-evident  that  when  one  depends  upon  the  or- 


80  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

ganizatiou  of  which  he  is  a  member  to  maintain  or  advance 
his  wages,  rather  than  upon  his  own  individual  merit,  he 
is  on  the  road  toward  dependency. 

Good  honest  muscle,  skill,  and  energy  are  the  most 
staple  of  all  things,  and  they  rarely  fail  to  meet  with  good 
demand.  This  is  especially  true  of  every  one  who  is  con- 
scientious in  regard  to  the  interest  of  his  employer.  It 
seems  to  be  the  aim  of  labor  organizations  to  make  the 
laborer  as  inefficient  as  possible.  Theirs  is  a  levelling  pro- 
cess, and  any  special  energy  is  discountenanced.  One  who 
displays  these  qualities  is  cultivating  independence  ;  there- 
fore he  receives  no  encouragement.  It  is  assumed  that 
labor  is  a  necessary  evil,  and  the  less  of  it  one  can  get 
along  Avith  the  better.  The  theory  is,  that  with  fewer 
hours,  or  a  smaller  amount  accomplished,  the  more  room 
will  be  left  for  the  employment  of  others  of  the  organiza- 
tion. It  requires  but  a  glance  at  these  well-defined  tenden- 
cies to  see  that  they  are  unfavorable  to  the  formation  of 
any  type  of  character  that  is  manly  or  self-reliant.  The 
sentimentality  of  the  times  that  looks  upon  the  working- 
man  as  a  poor,  oppressed,  down-trodden  being,  is  absurd 
when  applied  to  an  American  laborer,  and  his  self-respect 
ought  to  rebel  against  any  such  assumption. 

The  theory  that  wages  are  worth  any  specified  sum,  re- 
gardless of  the  market,  is  not  sound  ;  and  every  workman 
of  any  intelligence  ought  to  be  able  to  see  this.  There  is 
no  other  possible  conclusion  in  harmony  with  Xatural  Law, 
but  that  anything,  even  labor,  is  worth  just  what  it  will 
bring  in  a  free  and  untrammelled  market.  It  is  impossible 
to  devise  any  other  measurement.  The  idea  that  wages 
must  yield  a  fair  support  under  all  circumstances,  is  im- 
practical in  the  business  world.  Charity  is  the  highest  and 
brightest  of  all  virtues  in  its  legitimate  sphere;  but  its 
province  is  not  in  fixing  market  prices.  The  charitable 
idea  would  not  harmonize  with  the  dignity  of  labor,  and 


COMBINATIONS   OF   LABOR.  81 

every  intelligent  and  self-respecting  laborer  would  scorn 
the  sentiment  that  he  is  a  pauper  or  semi-pauper,  or  that 
he  ought  to  receive  what  he  had  not  fairly  earned.  No; 
the  average  workingman  of  America  is  well  able  to  take 
care  of  himself,  and  not  so  imbecile  as  to  require  guardian- 
ship. It  is  for  him  to  decide  whether  or  not  it  is  for  his 
interest  to  accept  an  offer  for  his  services,  or  to  look  for  a 
more  favorable  opportunity.  He  is  a  man;  and  as  such 
should  do  business  for  himself.  As  a  social  unit,  he  should 
strive  to  become  an  independent  member  of  society.  If  in 
individual  experience  he  make  some  mistakes,  even  these 
have  educational  value. 

Third.  Personal  freedom  of  action  and  contract  is  sur- 
rendered to  the  control  of  others,  whose  judgment  is  often 
faulty  and  prejudiced. 

The  question  comes  to  every  intelligent  workman :  Can  I 
afford  to  surrender  my  personal  liberty,  freedom  of  choice, 
duties  to  myself,  family,  and  conscience,  to  any  secret  and 
irresponsible  tribunal  ?  Ought  I  to  consent  to  be  ordered 
"  out "  or  "  in,"  regardless  of  my  personal  wishes,  in  a  land 
where  individual  liberty  of  action  is  the  distinguishing 
characteristic  ? 

With  perhaps  the  partial  exception  of  the  society  known 
as  the  "  Brotherhood  of  Locomotive  Engineers,"  which  is  a 
more  intelligent  and  benevolent  organization  than  the  aver- 
age, the  system  of  strikes  seems  to  be  an  important  element 
in  the  working  policy  of  labor  combinations.  Strikes  are 
violent  efforts  to  defy  Natural  Law,  and  are,  therefore, 
harmful  and  expensive.  Even  when  apparently  successful, 
it  will  be  found  that  their  influence,  in  the  long  run,  is 
disadvantageous. 

The  most  conservative  and  moderate  estimate  of  the 
yearly  loss  to  the  laboring  men  of  the  United  States,  caused 
l)y  the  strikes  of  1886  and  since,  would  mount  high  up  in 
the  millions ;  and  the  indirect  results,  if  their  influences 


82  THE  POLITICAL  ECONOMY  OP  HUMANISM. 

could  all  be  traced,  would  be  even  greater.  The  discharge 
of  a  single  union  man,  or  the  retention  of  a  non-unionist, 
has  been  the  excuse  for  strikes  involving  thousands,  with 
great  attendant  suffering  and  loss ;  and  all  this  to  vindicate 
a  supposed  principle,  which  really  turns  out  to  be  only  a 
sentimental  "  boomerang."  Such  was  the  nature  of  the 
very  extensive  and  disastrous  strike  which  took  place  in 
the  spring  of  1886,  on  what  was  known  as  the  Gould  sys- 
tem of  railroads,  extending  from  St.  Louis  to  Texas.  Thou- 
sands of  men,  many  of  whom  had  families  depending  upon 
their  daily  earnings,  were  "  ordered  out "  of  good  situa- 
tions, which  they  never  afterwards  regained.  Thousands  of 
others,  whose  occupations  were  more  or  less  directly  con- 
nected with  these  men,  were  thrown  out  of  employment 
and  business  of  all  kinds  largely  interrupted  for  weeks  in 
three  or  four  States,  causing  great  loss  to  all  classes.  Much 
property  was  destroyed,  and  many  non-union  workers  in- 
jured and  maltreated.  All  these,  and  other  ills  too  numer- 
ous to  mention  in  detail,  resulted  from  the  ill-advised  and 
cruel  orders  given  to  confiding  men  by  labor  officials.  It 
is  a  fact  beyond  doubt,  that  what  would  have  been  a  great 
and  general  resumption  of  prosperity  in  the  business  of  the 
whole  country,  which  had  begun  to  set  in  strongly  in  the 
early  spring  of  1886,  was  not  only  postponed,  but  almost 
destroyed,  by  the  labor  disturbances  which  came  in  April 
and  May  of  that  year,  like  an  epidemic.  The  same  thing 
has  been  often  repeated  since.  And  furthermore,  these 
troubles  were  not  spontaneous  in  their  character,  but  were 
"  ordered,"  engineered,  and  fomented  by  "  agitators,"  who 
did  not  belong  in  the  ranks  of  the  workingmen.  If  things 
could  remain  in  their  normal  and  peaceful  condition,  so 
that  an  era  of  general  prosperity  could  once  get  under  way, 
the  increased  demand  for  labor  would  cause  a  natural  ad- 
vance in  wages  and  general  prosperity.  One  more  example 
of  "  killing  the  goose  which  lays  the  golden  egg."     ls"atural 


COMBINATIONS   OF  LABOR.  83 

Law  is  a  most  powerful  and  serviceable  friend ;  but  if  we 
persist  in  its  violation,  we  must  reap  the  consequences. 

One  or  two  more  instances  of  the  effect  of  strikes  will 
suffice,  for  they  are  all  quite  uniform  in  their  results.  In 
July,  1886,  a  large  number  of  tanners,  employed  in  the 
extensive  establishments  of  Salem  and  of  Peabody,  Mass., 
were  '•  ordered  out."  In  the  end,  most  of  the  men  lost  their 
places,  and  had  to  remove  elsewhere  to  find  work.  During 
several  months,  assaults,  intimidation,  and  disorder  contin- 
ued, and  these  towns  were  put  to  large  extra  expense  to 
protect,  as  well  as  possible,  those  who  wished  to  work.  The 
indirect  losses  and  suffering  growing  out  of  this  strike  can 
never  be  estimated.  The  Peabody  Reporter  gave  a  very 
careful  estimate  of  the  direct  results  on  Nov.  10,  1886.  A 
personal  canvass  of  all  the  shops  of  Salem  and  Peabody 
was  made,  and  every  detail  carefully  ascertained.  It  re- 
ported as  follows  :  — 

"On  July  12,  1,500  men  left  work  in  forty-three  factories,  and  on 
November  10  there  were  employed  in  these  same  factories  1,205  men. 
In  the  other  thirty-one  factories,  613  men  went  out  at  the  same  time, 
and  in  these  factories  509  men  are  now  at  work.  This  makes  a  total 
of  2,113  men  men  who  quit  work  July  12,  and  a  total  of  1,714  men 
employed  in  the  same  factories  to-day.  Had  these  men  worked, 
they  would  have  received  $456,408.  It  is  estimated  that  they  have 
lost,  aside  from  the  amount  received  from  the  Knights  of  Labor, 
$304,272." 

As  a  result  of  the  eight-hour  agitation  during  the  spring 
and  summer  of  1886,  the  pork  and  beef  packers  of  Chicago 
gave  that  system  a  continued  and  thorough  trial.  As  com- 
peting cities  continued  on  the  ten-hour  basis,  the  inevitable 
result  soon  became  apparent.  The  business  could  be  done 
more  cheaply  at  those  places,  and,  as  Natural  Law  is  never 
idle,  the  industry  was  rapidly  transferred  to  them.  The 
Chicago  packers,  finding  it  useless  to  hold  out  against  the 
inevitable,  notified  their  help  oarly  in  November  that  they 


84  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

would  be  obliged  to  return  to  the  ten-hour  system.  Eather 
than  accede  to  this,  twenty  thousand  men  were  "  ordered 
out ; "  and  this  just  at  the  beginning  of  winter,  when  a 
great  majority  had  nothing  ahead,  and  thousands  had  fam- 
ilies dependent  for  subsistence  on  their  daily  labor.  The 
hostile  presence  of  such  a  mass  of  idle  men  made  it  utterly 
unsafe  for  any  minority  to  continue  at  work.  The  few  who 
attempted  it  found  their  lives  and  homes  in  imminent  danger. 
Plenty  of  non-union  men,  who  wanted  employment,  could 
only  be  scantily  protected  by  two  regiments  of  infantry, 
sent  at  the  expense  of  the  State,  in  addition  to  a  large  force 
of  private  police.  It  is  true  that  officials  of  the  Knights  of 
Labor  ostensibly  discourage  violence,  but  the  difficulty  is 
with  the  system.  It  is  a  cruel  thing  to  order  twenty  thous- 
and dependent  and  unintelligent  laborers  out  of  their  posi- 
tions at  the  beginning  of  winter,  and  it  is  folly  to  expect 
that  they  Avill  stand  idly  by  and  see  their  places  taken  by 
others.  It  is  farcical  to  say  to  them,  "  keep  quiet,"  for 
these  unfortunate  men  have  a  terrible  pressure  on  them, 
forcing  them  not  to  keep  quiet. 

Look  for  a  moment  at  the  ultimate  effect  of  a  rise  in 
wages,  when  caused  by  the  pressure  of  labor  organizations, 
without  striking.  For  illustration :  Suppose  that  the 
natural  and  competitive  cost  of  a  certain  style  of  boot  is 
five  dollars  per  pair  as  produced  in  Lynn,  and  that  one  hun- 
dred thousand  pairs  are  made  and  sold  annually.  Now 
suppose  that  the  labor  unions  in  that  city  get  such  a 
thorough  control  that  by  quiet  pressure,  the  crimper, 
laster,  stitcher,  and  all  the  various  other  kinds  of  work- 
men each  establish  a  moderate  advance,  so  that  it  then 
makes  the  cost  of  the  boot  five  dollars  and  twenty-five  cents 
instead  of  five  dollars  as  before.  The  combination  has 
carried  its  point,  but  has  it  made  any  gain  ?  The  first 
effect  would  be  felt  in  a  lessened  demand.  The  average  man 
would  wear  his  old  boots  a  little  longer,  or  buy  some  other 


COMBESTATIONS   OF   LABOR.  85 

style  in  place  of  them.  Instead  of  one  hundred  thousand 
pairs,  it  would  be  found  at  the  end  of  the  year  that  a  less 
number,  say  ninety  thousand  pairs,  had  been  the  limit  of 
demand.  Therefore  one-tenth  of  these  workmen  have 
been  thrown  out  of  employment.  Now  look  at  another 
tendency.  If  in  Haverhill,  and  other  competing  points, 
natural  competition  still  enables  the  same  boot  to  be 
produced  for  five  dollars,  the  business  would  at  once 
begin  to  leave  Lynn  ;  for,  by  Natural  Law,  it  always  seeks 
the  cheapest  producing  points.  Not  only  the  general  demand 
would  fall  off,  but  competition  would  soon  force  the  Lynn 
manufacturers  to  stop  entirely  the  production  of  this  boot. 
Some  of  their  workmen  would  have  to  sacrifice  their  homes, 
and  move  elsewhere,  and  that  city  would  decline  in  pros- 
perity. Some  one  may  reply  that  by  general  combination, 
the  advance  could  be  obtained  at  all  points  in  the  State. 
That  would  not  in  the  least  affect  the  first  result,  which  was 
a  lessening  of  general  demand.  But,  in  addition,  if  all  sec- 
tions of  the  State  combined,  it  would  tend  to  drive  the 
business  to  other  States,  to  the  West  and  other  parts  of  the 
country.  This  would  cause  a  loss  of  dollars  to  the  Massa- 
chusetts bootmakers,  in  an  attempt  to  grasp  dimes.  With 
the  levelling  influence  of  world-wide  competition,  such  arti- 
ficial coercion  is  only  harmful.  The  principle  illustrated  in 
the  case  of  boot  manufacturing  is  universal  in  its  applica- 
tion, and  no  kind  of  production  is  exempt  from  its  irresistible 
control.  A  man  might  as  well  try  to  lift  himself  by  the 
straps,  when  wearing  a  pair  of  these  boots,  as  to  expect  to 
mount  above  the  force  of  these  fundamental  business  laws, 
or  to  escape  from  the  penalty  of  their  violation. 

If  it  were  possible  by  universal  combination  among  work- 
ing-men to  advance  %vages  fifty  per  cent,  it  woxdd  not  in  the 
least  improve  their  condition.  The  price  of  everything  which 
they  need  would  be  enhanced  in  the  same  proportion,  and 
they  would  have  no  larger  surplus  at  the  end  of  the  year 
than  they  had  before. 


86  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

The  system  of  assessments  necessary  to  keep  in  motion 
all  the  machinery  of  labor  organizations,  including  the  sal- 
aries of  officials,  together  with  the  very  large  sums  neces- 
sary to  maintain  in  idleness  those  who  are  "  out,"  add  still 
more  to  the  burdens  of  the  working  man.  War  is  always 
expensive ;  and  this  conflict,  not  with  emploj'-ers,  but  with 
supply  and  demand,  is  a  costly  operation.  The  promises 
made  by  the  labor  agitators  seem  attractive  and  desirable, 
but  their  fruits  turn  out  to  be  bitter.  It  is  noticeable 
that  vehement  champions  of  the  labor  cause,  who  have 
been  zealous  to  have  the  wrongs  of  the  working  man 
righted  through  coercion,  have  soon  after,  in  many  cases, 
been  found  in  the  field  as  candidates  for  some  political 
office. 

When  sentimental  agitators  try  to  make  the  working 
man  restless,  by  teaching  him  that  labor  is  a  dependent 
condition,  and  that  he  is  in  "  slavery,"  he  should  not  forget 
that  the  average  price  of  labor  for  many  years  has  been 
steadily  advancing  from  natural  causes.  It  is  now  about 
double  what  it  was  thirty  or  thirty-five  years  ago.  On  an 
average,  it  took  more  than  twice  the  amount  of  labor  to 
buy  a  given  amount  of  flour,  sugar,  clothing,  and  most  other 
family  necessities,  than  it  does  at  the  present  time.  The 
single  item  of  rent  is  perhaps  dearer ;  but  with  that  excep- 
tion, nearly  every  necessity  and  luxury  has  declined  during 
the  period  in  which  wages  have  doubled.  This  shows  a 
great  advance  in  labor  values  from  the  operation  of  Natural 
Law ;  and  they  would  have  been  still  higher  than  they  are 
had  their  rise  not  been  obstructed  during  the  last  few  years 
by  the  detrimental  operation  of  labor  unions.  In  spite  of 
the  influence  of  unrestricted  immigration,  the  general  rate 
of  wages  is  more  than  double  what  it  is  in  Europe.  Every- 
thing shows  that  the  present  unrest,  now  existing  among 
the  manual  laborers  of  America,  is  in  no  degree  the  result  of 
changed  conditions  for  the  worse ;  but  that  it  is  due  to  a 


COMBINATIONS   OF   LABOR.  87 

false  philosophy,  the  seeds  of  which  are  persistently  sown 
by  foreign  agitators,  whose  theories  are  advertised  so  abun- 
dantly by  the  sensational  portion  of  the  newspaper  press. 
The  vagaries  of  the  greatest  extremists  thus  get  a  large 
amount  of  notoriety. 

In  regard  to  boycotts,  it  is  observable  that  they  are  un- 
business-like  and  revengeful  in  their  conception,  unnatural 
and  un-American  in  their  methods,  and  deranging  in  their 
effect  on  all  legitimate  business.  It  is  a  privilege  and  a 
necessity  for  the  wage-worker  who  has  limited  means  to 
expend,  to  buy  the  best  goods  at  the  lowest  prices  possible 
in  a  free  market,  whether  or  not  they  were  made  by  mem- 
bers of  a  union.  To  pay  more  for  purposes  of  revenge  is  a 
loss  to  the  laborer,  and  an  injury  to  society,  of  which  he  is 
a  part. 

Fourth.  Labor  combinations  are  tyrannical  in  their 
action  towards  all  unorganized  laborers. 

They  assume  to  represent  labor  in  general,  but  statistics 
show  that  but  a  small  part  of  the  grand  aggregate  of  labor- 
ing men  belong  to  organizations.  The  interests  of  this 
large  majority  are,  to  a  great  extent,  ignored  by  the  public, 
and  despised  by  the  combinations.  No  matter  how  honest, 
industrious,  and  law-abiding  they  may  be,  they  are  "  scabs," 
and  receive  moral,  and  often  physical  treatment  more  worthy 
of  criminals  than  law-abiding  citizens.  The  public,  with  a 
singular  absence  of  that  sense  of  justice  which  is  theoreti- 
cally dear  to  American  citizens,  seems  to  expect  more  or 
less  of  this  condition  of  things  as  a  matter  of  course,  and 
moral  and  social  abuse,  when  not  accompanied  by  physical 
assault,  is  treated  as  a  matter  of  slight  consequence.  Legis- 
lative law  professes  to  protect  every  man  in  his  right 
either  to  buy  or  sell  labor  or  any  other  thing  of  value  in  the 
open  market.  A  recent  writer  has  well  said  that  "  attempts 
to  do  away  with  this  right  by  forc(>,  intimidation,  or  inter- 
ference, have  their  logical  end  in  anarchy.     The  majesty  of 


88  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

the  law  is  the  foundation  of  all  liberty  and  prosperity,  and 
every  man  should  give  it  his  moral  support." 

Sentimental  writers,  as  a  rule,  utterly  ignore  the  great 
unorganized  majority  of  laborers,  as  if  no  such  people 
existed.  When  they  speak  of  labor,  they  refer  only  to  the 
minority  portion,  or  that  which  is  organized.  Are  not  these 
men  American  citizens  ?  and  are  they  not  entitled  to  com- 
mon rights  and  protection  under  a  form  of  government  which 
professes  to  be  democratic  and  impartial  ?  They  have  a 
right  to  sell  their  services  as  they  choose  to  willing  pur- 
chasers, and  when  the  government  fails  to  protect  them  in 
this  privilege,  then  the  boasted  American  freedom  is  a  farce. 
These  men,  as  a  class,  are  ignored  by  the  politician  in  his 
zeal  to  bid  for  the  labor  vote,  and  even  the  newspaper  press, 
as  a  rule,  gives  them  scanty  recognition.  They  are  peace- 
able, law  abiding,  and  unobtrusive,  but  at  the  same  time 
form  a  very  important  part  of  the  live-oak  in  the  hull  of 
the  "  Ship  of  State." 

Fifth.  The  logical  tendency  and  influence  of  labor 
combinations  are  in  the  direction  of  a  levelling  coercive 
socialism. 

Socialism  as  a  political  system  will  be  elsewhere  dis- 
cussed, but  the  logical  tendencies  which  have  cropped  out 
of  the  agitations  of  organized  labor  are  so  marked  that 
they  may  be  briefly  noted  in  this  connection.  "When  natu- 
ral and  business  principles  are  left  behind,  and  sentimental 
methods  adopted,  all  solid  ground  is  abandoned.  As  well 
attempt  to  found  a  solid  structure  on  the  quicksand,  or  com- 
bine mathematics  with  fiction,  as  to  expect  that  business 
can  prosper  with  personal  independence  and  ambition 
crushed  out.  The  natural  and  logical  outcome  of  any  com- 
pulsory kind  of  socialism,  in  the  end,  is  the  disruption  of 
society  and  government.  There  is  a  close  and  growing  sym- 
pathy between  labor  and  socialistic  organizations,  especially 
in  the  larger  cities.     The  socialist  holds  out  an  alluring  bait 


COMBINATIONS   OF  LABOE.  89 

to  the  ignorant  masses  of  foreign  laborers,  and  soon  they 
are  made  to  feel  that  because  some  others  have  more  of  the 
results  of  accumulated  labor  than  they  possess,  the  world  has 
not  been  fair  with  them,  and  they  have  not  had  their 
"  rights." 

The  only  test  of  the  soundness  of  theories  is  contained 
in  their  practical  working,  and  this  renders  the  experience 
of  Australia  with  organized  labor  of  interest.  Nowhere 
else  on  the  face  of  the  globe  has  unionism  ever  gained  such 
a  complete  domination  as  it  there  possessed  previous  to  its 
recent  dethronement.  In  the  Engineering  Magazine  for 
April,  1893,  Edmund  Mitchell,  an  able  writer  and  economist 
of  that  country,  gave  a  detailed  account  of  the  great  con- 
test. It  finally  disrupted  the  unions  and  also  nearly  wiped 
out  the  principal  colonial  industries,  turning  prosperity  into 
chaos,  and  this  notwithstanding  their  almost  unbounded 
natural  agricultural  and  mineral  resources.  Four  long  and 
desperate  strikes  extended  into  trades,  occupations,  and 
localities,  entirely  distinct  from  the  original  controversies, 
involving  thousands  of  innocent  people  in  distress  and  bank- 
ruptcy. Among  many  other  interesting  particulars  of  this 
long  industrial  war,  Mr.  Mitchell  says :  — 

"  It  has  to  be  noted  that  in  no  single  instance  did  these  disputes 
originate  from  or  hinge  upon  a  disagreement  as  to  wages.  Brushing 
aside  a  few  minor  issues  involved,  we  find  that  the  one  cause  of  quar- 
rel throughout  was  the  demand  on  the  part  of  the  strikers  for  the 
exclusive  recognition  of  unionism,  and  the  firm  determination  of  the 
employers  to  refuse  to  concede  that  demand.  Had  the  unionists 
won  the  day,  there  can  be  no  doubt  that  every  worker  in  Australia 
earning  his  living  by  the  sweat  of  his  brow  would  have  been  com- 
pelled to  join  one  or  other  of  the  labor  organizations,  and  place  him- 
self under  the  domination  of  the  small  cliques  of  individuals  in  the 
big  cities  who  make  of  labor  agitation  an  exhilarating  and  lucrative 
profession.  To  show  how  thoroughly  labor  militant  in  Australia  has 
forced  employers  to  combine  in  self-defence,  let  xis  take  the  great 
wool-growing  industry,  which  adds  yearly  to  the  wealth  of  these  colo- 


90  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

nies  from  £20,000,000  to  £25,000,000.  The  lethargj-  and  lack  of 
cohesion  among  pastoralists  enabled  the  shearers'  union,  three  years 
ago,  to  acquire  a  position  of  almost  despotic  power.  Its  leaders 
boasted  that  they  controlled  the  shearing  in  ninety-five  per  cent  of 
the  wool-sheds.  In  the  framing  of  the  rules  which  regulated  in 
every  detail  the  manner  in  which  the  shearing  was  to  be  conducted, 
the  employer  had  no  voice  whatever;  he  had  either  to  accept  them 
or  to  enter  upon  the  almost  impossible  task  of  fighting  the  whole 
imion  single-handed.  Every  shearer  was  compelled  to  take  out 
his  union  ticket,  paying,  besides  entrance  fees,  £1  per  annum 
for  the  privilege;  and  the  man  who  refused  to  submit  to  this 
blackmailing  process  was  declared  a  pariah,  by  whose  side  no 
unionist  would  work  or  eat,  was  hounded  from  wool-shed  to  wool- 
shed  without  the  chance  of  securing  employment,  and  was  finally 
driven  out  of  the  industry.  The  weapon  of  the  boycott  was  ruth- 
lessly used  against  employers  and  non-unionist  shearers  alike;  and 
some  conception  of  the  wide-reaching  development  of  the  system 
will  be  derived  from  an  extract  from  a  manifesto  issued  by  the  shear- 
ers' union:  'We  intend,'  ran  this  official  document,  'to  teach  the 
squatter  the  folly  of  resistance  to  our  combination.  He  shall  not  be 
allowed  to  shear  his  wool  except  by  imion  labor.  But  if  he  should 
succeed  in  getting  the  wool  off  the  sheep's  back,  it  may  rot  in  his 
sheds,  for  we  shall  prevent  the  carriers  taking  it  to  the  railway;  and 
should  he  succeed  in  getting  it  to  the  railway,  we  shall  prevent  it 
going  to  sea,  for  we  shall  call  out  the  sailors  and  the  officers ;  and  if 
it  sails,  we  shall  prevent  its  discharge  in  London,  for  we  shall  call 
out  the  dock  laborers.'  " 

In  speaking  of  tlie  Broken  Hill  (Queensland)  mining 
strike,  Mr.  Mitchell  observes  :  — 

"  The  leaders,  who  are  now  serving  sentences  in  jail,  showed  them- 
selves to  be  professional  agitators  pure  and  simple.  Possessed  of  the 
gift  of  fluent  speech,  these  men,  not  miners  by  calling  at  all,  had 
foisted  themselves  upon  the  workers'  associations,  and  by  the  rhetori- 
cal trick  of  inflaming  envious  passions  and  stirring  up  strife  between 
the  employers  and  the  employed,  had  soon  attained  to  positions  of 
personal  ascendency,  the  toleration  of  which  among  large  bodies  of 
fairly-educated,  self-respecting  workingmen  is  almost  incredible.  The 
strike  was  the  very  opportunity  desired  by  the  leaders.  At  one  boimd 
they  became  persons  of  public  importance,  issuing  fierce  manifes- 


COMBINATIONS   OF   LABOR.  91 

toes,  having  their  speeches  telegraphed  across  a  great  continent, 
visiting  their  pickets  like  generals  in  the  field,  being  huzzaed  by  the 
mob  as  they  passed  along  the  streets,  and  generally  living  in  a  constant 
vapor-bath  of  self-esteem  and  servile  flattery.  All  these  are  simply 
the  necessary  preliminaries  to  securing  a  seat  in  Parliament,  and 
what  to  a  man  of  the  working  classes  is  a  very  large  income,  £300 
per  annum,  with  no  real  hard  work  to  do,  with  free  railway  travel- 
ling and  invitations  to  oflBcial  dinners." 

The  fundamental  issue  in  the  Australian,  as  in  all  other 
attempts  at  unionist  dictation,  is  :  Shall  the  freedom  of  con- 
tract be  destroyed  ?  Out  of  a  total  population  of  several  mil- 
lions in  Australia  there  were  only  seventy-five  thousand 
unionists.  Can  there  be  any  justice  in  the  claim  of  so  small 
a  fraction  of  the  able-bodied  male  population  to  monopolize 
the  whole  labor  market  ?  Can  they  in  any  sense  be  said  to 
represent  the  interest  of  Labor  ? 

The  abnormal  state  of  affairs  in  Australia  brought  on  a 
financial  panic,  and  upset  all  industrial  enterprises.  Inves- 
tors will  not  invest  but  withdraw  their  means,  so  far  as 
they  can,  wherever  there  is  chronic  friction  and  unrest. 
Australian  progress  was  turned  back,  and  years  will  be 
required  for  it  to  regain  its  former  momentum  and  again 
induce  such  a  return  of  confidence  as  will  attract  capital 
and  develop  resources.  Privates  in  the  ranks  of  labor  are 
often  unconscious  of  the  tyranny  that  is  perpetrated  in 
their  name  because  it  is  claimed  to  be  for  their  interest. 

The  interests  of  employer  and  employee  are  one,  and  it 
is  to  the  advantage  of  both  that  there  should  be  mutual 
confidence  and  sympathy.  The  more  conscientious  and 
hearty  the  service  the  more  the  emploj^er  can  afford  to  pay 
for  it;  and  the  more,  on  an  average,  he  tvill  pa}-.  Half- 
hearted service  will  not  permanently  command  a  high  price. 
The  union  official  strives  to  rend  asunder  the  two  elements 
which  form  the  natural  unit,  and,  in  the  degree  that  aliena- 
tion takes  place,  both  are  injured  —  the  employee  the  most. 


92  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

Auy  schism  among  members  of  the  social  organism  is  a 
common  misfortune.  Confidence  in  the  stability  of  business 
conditions  is  the  life-blood  of  prosperity. 

All  inefficient  or  indifferent  service  causes  moral  decay 
in  the  character  of  the  laborer.  Even  in  abnormal  cases 
where  his  remuneration  is  less  than  the  current  rate  he 
cannot  afford  to  degrade  his  manhood.  The  theory  that  in 
the  aggregate  there  is  a  certain  fixed  amount  of  work  to 
be  done,  and  that  fewer  hours  and  less  accomplishment  will 
give  more  workmen  an  opportunity,  is  shallow  fallacy. 
With  peaceful  conditions  and  prevailing  confidence  the 
ever-expanding  demand  of  the  world  equals  any  possible 
supply,  and  this  even  with  all  the  labor-saving  machinery 
that  has  been  or  will  be  employed.  It  may  be  asked :  Do 
you  favor  long  hours  ?  No ;  but  personal  freedom.  If  one 
choose  to  work  ten  hours  instead  of  eight  it  is  his  privilege, 
and  no  man,  organization,  nor  even  the  State,  has  the  moral 
right  to  coerce  him.  The  hours  of  labor  are  growing  less 
from  natural  causes.  The  workman  does  need  time  for 
mental  and  moral  improvement,  but,  important  as  these  are, 
freedom  is  still  more  so.  The  sagacious  employer,  even 
from  the  sole  standpoint  of  pecuniary  success,  will  find  it 
to  his  interest  to  shorten  hours,  and  favor  his  help  in  every 
way  that  surrounding  conditions  will  possibly  allow.  Natu- 
ral evolutionary  progress  is  in  the  direction  of  shorter  hours, 
but  there  should  be  no  arbitrary  dictation.  The  wise  em- 
ployer will  respect  the  manhood  of  his  employee  and  keep 
up  his  esprit  de  corps. 

The  seeming  over-supply  of  labor  comes  from  obstructive 
dictation  and  impaired  confidence.  The  capitalist  who 
would  build  a  block  of  houses  will  hesitate  long  before 
beginning,  if  he  is  likely  to  be  harassed  by  strikes,  boy- 
cotts, and  the  walking  delegate.  Business  and  confidence 
can  no  more  grow  under  such  conditions  than  could  a  gar- 
den flourish  were  it  continually  trampled  over  in  a  dis- 
orderly manner. 


COMBINATIONS   OF   LABOR.  93 

In  some  departments  an  overstocked  labor  market  is  the 
result  of  a  baseless  fancy  as  to  the  relative  social  grades  of 
various  kinds  of  service.  For  illustration :  Among  the 
occupations  of  women,  the  market  for  good  domestics,  in 
excellent  positions,  at  good  wages,  is  never  overstocked. 
But  shirt  makers,  who  might  make  good  domestics,  will 
work  at  starvation  prices  in  attics,  because  the  latter  are 
regarded  as  socially  inferior.  But  all  genuine  inferiority 
is  located  only  in  character.  The  sentimental  economist 
seems  blind  to  the  fact  that  false  pride,  ignorance,  and  im- 
providence—  to  say  nothing  of  intemperance  and  crime  — 
are  responsible  for  the  over-supply  of  labor,  and  goes  out 
of  his  way  to  lay  the  blame  upon  "  competition  "  or  a  wrong 
"  social  system."  He  makes  a  complicated  "  problem  "  out 
of  that  which  should  be  plain  to  the  commonest  common- 
sense. 

The  law  of  compensation  is  untiring  in  finding  the  spe- 
cific gravity  of  every  person,  and  in  meting  to  him  his  de- 
serts. If  it  seem  to  fail  in  some  cases  from  the  standpoint 
of  mere  monetary  accumulation,  it  will  not  permanently 
vary  when  tested  by  the  truer  measurement  of  human  har- 
mony and  happiness.  These  are  popularly  supposed  to  be 
secured  only  in  financial  profit,  and  therefore  wealth  is  ear- 
nestly sought.  A  deeper  view,  however,  proves  that  mere 
pecuniary  success  is  but  the  lower  and  smaller  part  of 
them. 

If  pebbles  could  be  coined  into  money  to  support  every 
inefficient  and  improvident  person,  it  would  do  him  an  in- 
jury, for  he  would  miss  all  educational  influences  and  disci- 
plinary penalties.  It  is  in  accord  with  the  purest  altruism 
to  declare  that  the  artificial  removal  of  the  corresponding 
punishments  which  are  the  natural  fruit  of  the  conditions 
before  named  would  be  positively  uncharitable.  If  the  great 
evolutionary  force  which  pushes  men  toward  higher  charac- 
ter were  wanting,  progress  would  be  paralyzed.     The  scien- 


94  THE  POLITICAL  ECONOMY  OF  HUMANISM. 

tific  way  to  relieve  suffering  is  to  reach  it  through  its 
causation.  The  ills  of  society  are  the  harvest  of  defective 
character,  and  it  is  as  logical  to  refer  them  to  lunar  influences 
as  to  the  social  system,  land  system,  or  the  law  of  competi- 
tion. If  ignorance  and  laziness  were  not  logically  followed 
by  want,  they  would  never  be  outgrown.  Beneath  all  the 
seeming  severity  —  which  does  and  should  enlist  our  hearty 
sympathy  —  natural  penalties  are  kindly.  But  intelligent 
philanthropy  will  address  itself  to  the  underlying  causes. 
Sentimentalism  cannot  improve  upon,  or  reverse,  the  divine 
plan  of  evolutionary  progress.  It  is  prolonged  cruelty  to  as- 
sure men  that  their  trouble  is  external.  The  charity  to  be- 
stow is  industrial  education,  self-help,  faithfulness,  honor, 
temperance,  love,  character.  To  misplace  the  fault  is  to  be 
unkind  to  the  individual  and  to  society.  If  one  leans  upon 
anything  outside  of  his  own  talents  and  powers,  he  is  leaning 
down  hill. 

The  restrictions  put  upon  apprenticeship  and  industrial 
education  by  conventional  unionism  are  distinctly  reaction- 
ary and  harmful  to  society  in  general.  The  most  helpful, 
hopeful,  and  important  agency  for  the  cure  of  prevailing 
economic  ills  is  general  industrial  education,  and  this  not 
alone  for  the  male  sex.  The  education  of  girls  in  household 
economy,  which  is  becoming  more  general,  is  a  great  advance 
in  the  right  direction. 

The  ideal  labor  union  would  strive  to  make  its  members 
experts  in  their  respective  vocations.  It  would  inspire  them 
with  wholesome  ambition,  independence,  and  honor.  It 
would  educate  them  technically  and  morally.  It  would 
make  them  men.  It  would  fit  each  one  to  rise  through  nat- 
ural ambition  and  merit  to  the  rank  of  employer.  ''  There 
is  always  room  at  the  top.-' 

Men  are  not  working  for  some  intangible  despot  called 
Capital.  Both  capital  and  labor  are  impersonal  conditions  ; 
while  all  injustice  is  personal. 


COMBINATIONS   OF   LABOR.  95 

As  a  rule  the  employer  hires  his  capital  and  the  capitalist 
is  not  an  employer.  If  either  violates  Natural  Law  the  pen- 
alty is  inevitable.  Is  this  doctrine  in  accord  with  the  golden 
rule  or  law  of  love  ?  Assuredly  yes.  If  sin,  economic  as 
well  as  moral,  did  not  bring  penalty  in  its  train,  men  would 
sin  forever. 

The  principles  enunciated  in  this  chapter  are  in  the 
interest  of  laborers,  and  from  their  true  standpoint.  In  pro- 
portion as  truth  is  recognized  prosperity  will  be  the  rule, 
wages  advance,  and  confidence  prevail. 

Prejudice  and  antagonism  invariably  bring  forth  bitter 
fruit,  and  this  rule  finds  no  exception,  in  any  rank  or  condi- 
tion. 


EMPLOYERS   AND   PROFIT   SHARING. 


"  But  he  whose  inborn  worth  his  acts  commend, 
0/  gentle  soul,  to  human  race  a  friend.^' 

POPB. 

"  And  each  shall  care  for  other, 
And  each  to  each  shall  bend, 
To  the  poor  a  noble  brother, 
To  the  good  an  equal  friend." 

Emersoit. 

"  Why  should  a  man  lohose  blood  is  warm  within. 
Sit  like  his  grandsire  cut  in  alabaster  ?" 

Merchant  of  Venice. 


"  And  learn  the  luxury  of  doing  good." 

Goldsmith. 


^^  0  slavish  man !  will  you  not  bear  with  your  own  brother,  who 
has  God  for  his  father,  as  being  a  son  from  the  same  stock,  and  of  the 
same  high  descent  ?  But  if  you  chance  to  be  placed  in  some  superior 
station,  will  you  presently  set  yourself  up  for  a  tyrant  f  " 

Epictetus. 

"  You  cannot  do  wrong  without  suffering  wrong.     Treat  men  as 

pawns  and  ninepins,  and  you  shall  suffer  as  xoell  as  they.     If  you 

leave  out  their  heart,  you  shall  lose  your  own.''^ 

Emerson. 


vni. 

EMPLOYEES  AND  PROFIT  SHARING. 

Natural  Law  is  as  supreme  and  unrepealable,  and  its 
penalties  as  sure,  in  the  realm  of  capital  as  of  labor ;  there- 
fore its  dominant  tendencies  hold  as  firmly  with  employer 
as  with  employee.  The  sentimental  alienation  now  existing 
between  "  capital  and  labor  "  is  by  no  means  entirely  due 
to  the  unreasonableness  of  the  latter,  the  spirit  of  unionism, 
or  the  machinations  of  agitators.  The  unsympathetic  hard- 
ness of  the  employer  furnishes  the  soil  where  coercive  union- 
ism takes  root  and  thrives.  Abuses,  like  trees,  never  grow 
entirely  one-sided.  An  abnormal  protuberance  in  any  direc- 
tion indicates  that  there  is  some  opposing  correspondence. 
The  fault  of  a  creaking  wheel  is  often  found  in  its  bearings. 

In  production  the  natural  unit  is  the  combined  employer 
and  employee.  Completeness  comes  from  the  joining  of  un- 
like elements,  for  each  supplements  the  other.  All  unions 
of  employers  with  employers,  and  employees  with  em- 
ployees, except  for  social  and  educational  purposes,  are 
unnatural.  Superior  and  economical  production  is  secured 
by  a  harmonious  blending  of  the  different  parts  which  make 
up  a  whole.  A  horse  and  cart,  being  a  unit  for  their  appro- 
priate service,  can  accomplish  more  than  a  hundred  horses 
and  carts  when  separated,  or  even  disagreeing. 

Before  the  inauguration  of  the  factory  system,  when 
production  was  carried  on  under  more  primitive  conditions, 
employer  and  employee  were  comparatively  near  together. 
But  modern  extension  and  specialization  have  multiplied 
the  number  of  wage-earners  under  each  single  control,  and 

90 


100         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

put  them  at  a  distance  from  the  proprietor.  Corporate  pro- 
duction also  renders  the  wehling  of  the  parted  unit  still 
more  difficult.  Unless  the  chasm  can  be  bridged,  society 
loses  and  both  parts  suffer.  How  can  the  employer  most 
effectually  harmonize  prevailing  discord  ?  If  it  be  impos- 
sible for  him  to  maintain  the  personal  nearness  to  his  help 
which  was  formerly  the  rule,  something  else  equally  good 
must  be  substituted. 

While  business  should  be  done  on  business  principles, 
there  is  abundant  room  and  opportunity  for  other  obliga- 
tions outside  of  that  of  mere  service  rendered  and  paid  for. 
Natural  Law  comprehends  within  its  scope  not  only  eco- 
nomic rules  and  methods,  but  it  also  provides  an  important 
place  for  the  exercise  of  the  kindly  elements  that  are  in- 
herent in  man's  nature.  These,  while  not  strictly  entering 
into  a  business  contract,  surround  and  refine  it,  lighten  its 
burdens,  and  soften  its  cares.  They  are  like  the  springs 
and  cushions  to  a  carriage,  which,  while  they  have  no  direct 
relation  to  speed  or  distance,  render  progress  much  more 
comfortable  and  easy.  ISTatural  Law  is  democratic.  It 
recognizes  a  man  as  a  man  so  long  as  he  fulfils  the  con- 
ditions of  manhood.  The  duties  of  an  employer  to  his 
workmen  are  discharged  with  the  payment  of  stipulated 
wages,  so  far  as  they  relate  to  the  business  and  economic 
sphere  ;  but  there  are  other  relations  that  cannot  be  ignored. 
They  involve  a  recognition  of  the  fact  of  man's  intrinsic 
brotherhood,  and  that  each  individual  is  a  part  of  one  moral 
and  social  economy  ;  and  these  relations,  though  on  another 
plane,  are  equally  natural  and  necessary.  As  harmony  with 
Natural  Law  always  lends  powerful  aid  in  the  achievement 
of  success,  the  employer  who  heeds  these  higher  claims, 
more  fully  discharges  his  obligation  to  society,  and  at  the 
same  time  smooths  the  road  toward  his  own  prosperity. 

Employers  should  not  forget  that  laborers  are  men,  not 
machines.     A  larger  consideration  toward,  and  interest  in, 


EMPLOYERS   AND  PROFIT   SHARING.  101 

employees  would  largely  dispel  the  illusion  of  a  natural 
antagonism,  on  wliicli  labor  unions  flourish  and  production 
decreases.  The  workmen  are  the  staff  of  the  employer. 
A  general  might  almost  as  well  expect  a  successful  cam- 
paign with  his  staff  selected  from  the  hostile  army,  as  an 
employer  expect  good,  honest  service  from  men  whose 
feelings  are  antagonistic,  whether  with  or  without  good 
cause.  Cultivate  friendliness  and  sympathy  with  employ- 
ees, not  by  flattery,  but  by  genuine  interest  in  their  welfare. 
There  is  too  little  personal  contact  and  community  of 
feeling.  Misunderstandings  and  difficulties  vanish  when 
discussed  face  to  face  in  a  conciliatory  spirit.  Show  your 
workmen  that  you  are  more  truly  their  friend  than  the 
labor  agitator  who  comes  from  the  outside  to  stir  up  strife, 
and  the  latter's  occupation  will  be  gone.  In  this  direction, 
and  this  only,  can  the  remedy  for  labor  troubles  be  found. 
Disband  the  horizontal  and  combative  combinations  of 
laborers  with  laborers,  and  employers  with  employers,  and 
cultivate  alliances  and  interests  in  the  other  direction. 
This  can  only  begin  with  some  conciliation  on  both  sides ; 
for  both  have  been  looking  in  the  wrong  direction,  and 
emphasizing  a  selfish  independence.  The  pecuniary  success 
of  both  parties  can  only  be  increased  by  some  such  means. 
This  change  of  front  is  very  important,  notwithstanding 
it  is  contrary  to  the  position  taken  by  many  recent  writers 
on  the  "  labor  problem,"  the  burden  of  whose  effort  has 
been  to  urge  working-men  into  combinations  detrimental 
to  their  own  interests.  All  such  teaching  renders  the  solu- 
tion of  the  "  labor  problem  "  more  difficult.  The  head  and 
hands  must  have  one  object,  or  else  there  will  be  friction 
for  both.  All  that  has  been  recommended  can  be  done  by 
the  employer  without  injuring  his  own  self-respect  or  that 
of  his  employee.  A  unity  of  interest  between  employer 
and  employed  is  natural,  because  there  is  no  competition 
between  them.     Competition  is  always  horizontal,  or  on  the 


102        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

same  plane.  The  natural  competition  of  employees  is  with 
employees,  and  of  employers  with  employers.  The  union 
should  be  in  a  direction  to  form  the  unit.  To  solidify  and 
strengthen  one  element  to  the  neglect  of  the  other,  is  like 
sharpening  one  blade  of  a  pair  of  shears  when  its  com- 
panion is  useless. 

The  best  employers  naturally  attract  the  best  help,  and 
such  a  combination  has  great  strength.  The  employer  must 
assume  the  risks  and  contingencies  of  his  business ;  and  if 
he  be  wise  he  will  cultivate  all  those  elements  which  tend 
to  harmony  and,  as  a  natural  consequence,  to  success. 
Suppose  that  after  inventories  are  taken  at  the  end  of  the 
year,  the  owner  distribute  a  certain  part  of  his  surplus  to 
his  faithful  help ;  even  from  a  business  standpoint,  would 
it  not  be  a  good  investment  ?  While  not  a  legal  obliga- 
tion, it  would  not  be  a  charity,  but  simply  a  proper  reward 
for  special  faithfulness.  Can  we  doubt  that  such  a  course 
would  be  mutually  beneficial  in  the  long  run  ?  It  would 
require  very  strong  inducements  to  organize  a  strike  among 
workmen  dealt  with  in  such  a  spirit.  An  early  and  notable 
example  of  voluntary  profit-sharing  was  given  by  Leclair, 
a  French  employer,  more  than  fifty  years  ago.  After  suf- 
fering from  the  effects  of  discontent,  antagonism,  and 
unfriendly  suspicion  among  his  men,  he  resolved  to  try  an 
experiment.  In  1842,  after  calling  together  the  most  faith- 
ful of  his  help,  forty-four  in  number,  he  threw  upon 
the  table  a  bag  of  gold  containing  twenty-three  hundred 
and  seventy-five  dollars,  distributing  to  each  his  share, 
averaging  over  fifty  dollars  per  man.  This  was  an  object 
lesson  that  had  a  telling  effect.  Distrust  was  replaced  by 
confidence,  and  a  friendly  interest  and  trust  became  the 
rule.  When  the  men  found  that  they  had  an  interest  in 
their  employer's  prosperity,  they  became  faithful  to  every 
requirement,  and  performed  each  duty  more  carefully  and 
thoroughly.     The  mutual  benefits  of  the  principle  were  so 


EMPLOYERS  AND  PROFIT   SHARLNG.  103 

apparent  tliat  M.  Leclair  formally  adopted  it ;  and  although 
he  died  in  1872,  his  successors  still  continue  the  practice. 
At  the  present  time  there  are  more  than  two  hundred  firms 
in  Europe  which  have  adopted  this  plan  substantially,  vary- 
ing it  only  in  minor  details.  Quite  a  large  number  of  Ameri- 
can companies  and  individuals,  also,  have  employed  methods 
which  are  similar  in  spirit  and  practice.  Messrs.  Lorillard 
&  Co.,  of  New  York,  recently  distributed  in  one  year 
sixteen  thousand  five  hundred  dollars  among  their  help  as 
a  part  of  the  profit  which  they  were  willing  to  relinquish 
to  their  faithful  workmen. 

There  seems  to  be  nothing  else  at  the  command  of  the 
employer  so  promising,  aside  from  social  and  moral  influ- 
ences, as  profit  sharing  in  one  or  another  of  its  phases. 
Adequate  pecuniary  recognition  must  be  given  to  special 
fidelity  and  length  of  service.  The  particular  method  of 
the  applied  principle  will  necessarily  depend  upon  the  char- 
acter of  the  business.  The  employee  must  become  con- 
vinced that  the  success  of  his  employer  includes  his  own 
success.  Under  profit-sharing,  as  already  outlined,  it  is 
obvious  that  in  cases  of  exceptional  loss  the  burden  must 
be  borne  entirely  by  the  proprietor.  The  plan  suggested 
leaves  the  full  legal  and  moral  control  of  everything,  over 
and  above  the  stipulated  wages,  with  the  employer.  But 
special  liberality  will  promote  his  prosperity,  and  accord 
with  Natural  Law,  even  though  he  may  be  unaware  of  it. 
Profit  sharing  is  not  charity,  even  if  purely  voluntary.  The 
independence  and  self-respect  of  the  employee  must  be 
preserved.  The  best  principle  is  the  best  policy.  For 
railroad  and  otlier  large  corporations  the  enhancement  of 
the  workman's  interest  may  perhaps  be  stimulated  by  in- 
surance during  employment  against  casualty  or  illness,  or 
by  a  system  of  added  percentages  to  ordinary  wages,  in- 
creasing somewhat  for  every  continuous  year  of  faithful 
service. 


104        THE  POLITICAL  ECONOMY  OP  HUMANISM. 

There  are  still  other  modifications  of  the  principle,  some 
of  which  are  more  distinctively  co-operative.  One  of  these 
has  been  very  successfully  tried  for  several  years  by  the 
X.  0.  Nelson  Manufacturing  Company,  of  St.  Louis,  of 
which  a  brief  account  may  be  of  interest.  Their  experi- 
ence has  been  very  significant.  For  eight  years  after  pay- 
ing annually  six  per  cent  dividends  to  the  invested  capital, 
they  divided  an  average  of  eight  per  cent  dividends  on 
wages  also.  Employees  are  also  allowed  to  become  share- 
holders in  the  company.  During  the  financial  depression 
of  the  summer  of  1893,  the  employees  willingly  worked 
full  time  on  three-quarters  pay,  for  the  double  purpose 
of  husbanding  resources  and  joining  in  the  probable  loss 
of  that  exceptional  year.  The  amount  deducted  from 
wages  was  to  be  made  up  out  of  future  profits,  and  the 
capital  shares,  in  any  finally  ascertained  loss,  in  the  same 
ratio  as  the  wages.  This  is  genuine  co-operation,  but  the- 
orists will  please  note  that  the  legitimate  competitive  ele- 
ment is  still  present  in  the  relations  of  the  company 
with  neighboring  companies  in  the  same  line  of  production. 
Under  such  a  plan  employees  become  real  partners,  and  their 
interest  in  the  success  of  the  company  is  greatly  deepened. 

Another  plan,  sometimes  practicable,  is  to  impartially 
merge  a  business  into  a  stock  company  and  allow  employees 
to  acquire  shares  at  a  normal  valuation. 

We  advise  all  large  employers,  whether  or  not  subject 
to  "labor  troubles,"  to  thoroughly  test  some  one  of  these 
devices  for  a  consolidation  of  interests.  They  are  in  full 
accord  with  both  social  and  economic  law  and  promise  well. 
Profit  Sharing  embodies  the  spirit  that  will  furnish  the 
key  to  labor  problems. 

Its  denunciation  by  niggardly  and  short-sighted  em- 
ployers, on  one  hand,  or  selfish  professional  agitators  on 
the  other,  cannot  shake  it,  for  it  is  founded  on  justice  and 
humanity.      Unselfishness    should    be  the  motive  of  the 


EMPLOYERS   AND   PROFIT   SHARLNG.  105 

employer,  but  even  from  the  lower  stand-point  to  share 
profits  is  to  increase  them. 

The  employer  should  take  a  deep  interest  in  the  dis- 
semination of  correct  principles  in  morals,  temperance,  and 
hygiene  among  his  workmen,  and  by  his  influence  and  aid 
further  all  practical  movements  for  their  improvement. 
Opportunities  for  this  vary  much  in  different  places  and 
conditions,  but  there  is  room  for  a  great  and  general  ad- 
vance in  these  particulars.  Large  employers  whose  estab- 
lishments are  in  small  factory  towns,  have  it  especially  in 
their  power  to  accomplish  much  for  the  good  of  their  help, 
without  any  sacrifice  of  independence  on  the  part  of  the 
workmen. 

Many  employers  mistake  their  own  interests,  and  add  to 
their  diificulties,  by  an  unnecessary  severity  toward  their 
employees,  and  the  exercise  of  an  overbearing  and  tyran- 
nical tempsr.  Such  a  spirit  is  a  formidable  obstacle  to 
success. 

What  are  known  as  ''lock-outs"  are  sometimes  resorted 
to,  to  force  concessions  from  employees.  They  are  unnatural, 
and  in  many  cases  cruel  in  their  effects ;  and,  except  in  rare 
instances  to  counteract  wholesale  dictation,  they  are  repre- 
hensible. When  used  for  the  purpose  of  artificially  putting 
down  the  price  of  labor,  they  are  to  be  condemned  from  a 
moral  point  of  view ;  and  they  also  bring  their  own  legiti- 
mate punishment,  as  a  violation  of  Natural  Law.  Any 
kind  of  combination  among  employers,  having  in  view 
a  compulsory  reduction  of  wages,  or  harder  conditions,  is 
unwise,  because  it  arouses  an  antagonistic  spirit  among 
employees,  and  is  unprofitable  also  in  its  after  effects. 
Only  in  exceptional  cases,  to  resist  wholesale  tyranny  on 
the  part  of  labor  unions,  on  tlie  principle  of  combating  one 
evil  with  another,  can  there  be  any  excuse  for  combina- 
tions among  employers. 

What  is  called  black-listing  is  also  a  weapon  that  should 
be  used  with  extreme  care,  if  at  all,  because  it  is  very  liable 


106        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

to  abuse.  If  it  were  always  confined  to  bad  employees,  so 
proved,  it  might  have  redeeming,  and  perhaps  wholesome 
features.  It  is,  however,  so  often  employed  to  gratify  per- 
sonal prejudice,  that  its  legitimate  use  is  extremely  restricted. 
The  natural  elements  tending  powerfully  towards  suc- 
cess to  an  employer  of  labor  are  the  development  of  an 
esprit  de  corps  among  his  help,  and  the  secure  possession  of 
their  respect  and  good-will.  An  ideal  establishment  is  one 
where  employer  and  employee  are  each  proud  of  their  con- 
nection with  the  other.  Such  a  combination  means  the 
highest  wages,  and  at  the  same  time  the  best  and  most 
economical  production. 


EMPLOYEES:    THEIR    OBLIGATIONS   AND 
PRIVILEGES. 


"  No  man  is  born  into  the  tcorld  whose  work  \ 

Is  not  born  with  him.  There  is  always  ivork, 
And  tools  to  work  withal,  for  those  loho  will ; 
And  blessed  are  the  horny  hands  of  toil.'''' 

James  Russell  Lowell. 

"  The  brave  man  carves  out  his  fortune,  and  every  man  is  the  son 

of  his  oivmvorks.'''' 

Cervantes. 

"  The  people  never  give  up  their  liberties  but  under  some  delu- 

sion.^^  ' 

Burke.  i 


"Be  satined  with  success  in  even  the  smallest  matter,  and  think 
that  even  such  a  result  is  no  trifle.^'' 

Marcus  Aurelius. 


"  Never  esteem  anything  as  of  advantage  to  thee  that  shall  make 
thee  break  thy  toord  or  lose  thy  self-respect." 


Ibid. 


"Men  my  brothers,  men  the  workers,  ever  reaping  something  new 

Tennyson 


"  The  sleep  of  a  laboring  man  is  sioeet.'' 

ECCLE9IASTES. 


t 

i 

I 

'>        i 


IX. 

EMPLOYEES:    THEIR   OBLIGATIONS   AND 
PRIVILEGES. 

As  the  duties  and  interests  of  employees  are  touched 
upon  in  other  connections,  a  direct  study  of  them  may  be 
concise. 

The  prevailing  spirit  of  the  times  tends  to  make  the 
employee  regard  his  employer  with  some  degree  of  jealousy 
if  not  of  antagonism.  Such  a  feeling  is  both  morally  and 
economically  unprofitable.  The  employer  is  his  natural 
supplement  in  production,  and  besides,  no  one  else  is  in  a 
position  to  do  so  much  for  him.  Deprived  of  the  co-opera- 
tion of  his  employer's  talent,  capital,  and  executive  ability, 
he  is  weak  and  incomplete.  No  man  can  afford  to  pick  a 
quarrel  with  his  productive  partner,  nor  to  antagonize  the 
very  things  which  are  in  the  line  of  his  laudable  ambition. 
Without  employers  there  could  be  no  employees.  The 
theory  that  production  is  solely  the  result  of  physical  labor, 
as  urged  by  some  socialistic  agitators,  is  unmitigated  fal- 
lacy. If  material  force  be  all  that  is  required,  then  steam, 
electricity,  horses  and  mules,  and  even  water-power,  should 
receive  the  main  credit,  leaving  the  human  element  quite 
unimportant.  Matter  can  never  bear  comparison  with  mind, 
nor  a  mountain  with  a  man.  A  high  order  of  executive 
talent  is  more  rare  than  a  corresponding  quality  of  muscle, 
and  therefore  it  always  brings  a  higher  price.  Its  superior 
value  is  not  due  to  fashion  or  fancy,  but  to  demand.  The 
worth  of  muscle  also  depends  upon  the  quality  of  mind 
mixed  with  it.     To  lay  brick  requires  a  larger  percentage 

109 


110         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

of  mind  tlian  to  dig  ditches,  and  it  therefore  readily  brings 
a  higher  price.  By  the  socialistic  theory  that  the  value  of 
products  should  be  abstractly  estimated  by  the  number  of 
"  labor-hours  "  put  into  them,  the  expert  is  no  better  than 
the  ignoramus,  and  the  latter  might  as  well  remain  what  he 
is.  Under  free  conditions  Natural  Law  never  makes  a 
mistake  in  weighing  values. 

Education,  moral,  economic,  and  technical,  is  the  great 
need  of  the  wage-worker.  These  furnish  the  only  solid 
basis  for  wages  and  for  their  increase.  Obstruction  and 
friction  invariably  tend  toward  their  diminution.  Real  edu- 
cation is  not  the  acquisition  of  a  certain  amount  of  "  book 
learning,"  but  the  art  of  fitting  well  for  present  and  pros- 
pective duties.  It  is  entering  upon  a  road  which  always 
leads  higher. 

Evolution  is  a  universal  law  ;  but  if  one  waits  for  it  to 
push  him  from  behind  he  advances  slowly,  and  with  fric- 
tion. Attracted  from  before,  he  makes  rapid  progress. 
Excellence,  as  an  ideal,  furnishes  an  ever-present  stimulus. 
If  one  does  his  best,  it  does  not  so  much  matter  where  in 
the  great  field  of  human  effort  he  may  be  to-day,  for  he  will 
soon  leave  the  locality  behind  him.  Some  one  may  suggest 
that  opportunities  are  important,  but  they  are  largely  made, 
not  found.  "  Luck  "  comes  to  those  who  win  it.  Chance 
appears  upon  the  surface,  but  a  deeper  view  shows  that  all 
success  comes  by  law.  A  trade,  profession,  or  character  is 
like  an  edifice  ;  every  brick  must  be  put  in  its  place,  and  it 
will  not  get  there  by  luck. 

Work  is  not  a  curse  or  a  thing  to  be  avoided.  Rightly 
regarded,  it  is  education  and  development.  To  count  it  as 
drudgery  is  to  gratuitously  make  and  extract  a  slavish 
influence  from  it.  Looked  upon  as  an  education  and  step- 
ping-stone, it  is  refined  and  ennobled,  and  this  even  if 
low  conventionally  in  grade.  To  idealize  one's  present 
vocation  is  to  prepare  for  a  higher  and  more  profitable  one. 


employees:  their  obligations  and  privileges.  Ill 

Work  is  not  to  be  dodged,  but  transformed  into  develop- 
ment. The  man  must  lift  his  effort,  and  not  allow  it  to 
become  merely  mechanical.  One's  attitude  toward  it  deter- 
mines what  it  is  —  to  him.  It  also  indicates  whether  or 
not  he  will  advance  to  the  rank  of  employer. 

The  enjoyment  of  a  vacation  often  causes  a  workman 
to  feel  that  its  indefinite  continuance,  were  it  practicable, 
would  be  desirable.  But  only  because  work  is  the  rule  does 
recreation  possess  sweetness.  To  a  living,  progressive  man 
enforced  idleness  is  a  torture.  Lack  of  occupation  causes 
decay.  Even  when  underpaid,  the  wage-earner,  out  of  re- 
gard for  himself,  cannot  aft'ord  to  do  less  than  his  best. 
Through  the  law  of  compensation  every  one,  at  length,  gets 
exactly  his  due.  Specific  gra\dty  applies  not  solely  to 
fluids,  but  is  universal. 

The  employee  naturally  and  rightly  wants  increased 
wages ;  and,  through  Natural  Law,  the  only  road  to  them  is 
to  earn  more  or  better.  If  he  get  them  through  the  seem- 
ing short  cut  of  coercion  or  organized  pressure,  they  will 
soon  slip  back.     Progress,  to  be  solid,  must  be  natural. 

It  is  often  supposed  that  employers  might  pay  whatever 
wages  they  please,  regardless  of  the  market;  but  competi- 
tive relations  in  innumerable  directions  do  not  permit  it, 
and,  as  elsewhere  shown,  general  competitive  laws  are  as 
indispensable  to  wage-workers  as  to  society  at  large.  If 
labor-unions,  instead  of  limiting  apprenticeship  and  encour- 
aging idleness,  —  under  the  delusive  theory  that  the  total 
amount  of  work  to  be  done  is  limited  and  fixed,  —  would 
educate  their  members,  there  would  soon  be  enough  for  all 
to  do.  Each  kind  of  labor  is  tlie  patron  of  all  the  others, 
so  that  all  may  be  increased  by  balanced  growth.  Obstruc- 
tion beginning  in  one  trade  is  reflected  and  re-reflected  in 
all  the  others  until  all  suffer.  With  complete  harmony, 
wages  would  soon  rise  from  enlarged  demand.  This  is  the 
only  possible  basis  for  an  increase.    With  unobstructed 


112        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

prosperity,  invention  and  art  would  open  new  avenues  of 
employment,  and  over-production  be  unknown.  When  the 
sewing-machine  was  invented  no  less  seamstresses  were 
needed,  because  the  demand  for  sewing  at  once  increased 
to  the  full  capacity  of  the  improvement.  In  every  depart- 
ment, with  the  increase  of  facilities,  embellishment  and 
complex  design  take  the  place  of  plain  crudeness.  Fifty 
years  ago  only  the  carpenter,  mason,  and  painter  were  re- 
quired to  construct  an  average  dwelling,  while  now  a  score 
of  different  trades  lavish  their  skill  in  perfecting  its  con- 
venience and  adornment. 

General  economic  confidence  can  only  exist  upon  an 
adequate  foundation.  It  especially  requires  a  sound  cur- 
rency, an  unwavering  tariff,  whether  high  or  low,  and, 
most  of  all,  harmonious  labor  conditions.  With  this  com- 
bination, employment,  for  every  one  who  desired  it,  would 
be  sure  and  remunerative.  Things  to  be  done  would  mul- 
tiply faster  than  hands  to  do  them. 

The  goal  of  the  workman  is  to  become  a  proprietor,  and 
under  all  normal  conditions  such  an  ambition  is  laudable. 
In  our  own  country  no  individual  is  crystallized  into  any 
fixed  class  or  grade ;  and  if  artificial  dependence,  coercion, 
and  the  levelling  influences  of  unionism,  could  be  put  aside, 
workmen  would  have  an  unobstructed  road  to  progress  open 
before  them.  If,  however,  in  some  cases  it  be  impracticable 
to  rise  in  grade,  advancement  in  quality  is  possible,  which 
is  almost  equally  important. 

With  but  rare  exceptions,  the  most  eminent  and  success- 
ful business  men  of  America  started  in  active  life  as  wage- 
workers,  and  their  secret  is  that  in  every  position  they  did 
their  best.  This  was  their  self-education,  and  education 
is  capital.  Even  when  under-paid  that  kind  of  capital  is 
always  augmenting.  Where  wealth  has  been  acquired  by 
dishonorable  means  it  will  prove  a  curse.  The  moral  pen- 
alty for  Natural  Law  violated  is  inherent,  and  is  inevitably 
realized  sooner  or  later. 


EMPLOYEES  :  THEIR  OBLIGATIONS  AND  PRIVILEGES.  113 

However  much  specious  theories  may  prevail,  as  to 
short  hours,  lessened  production,  limited  apprenticeship, 
and  much  leisure,  individual  merit  will  always  remain  the 
sole  basis  of  value  for  service.  Economy,  energy,  and  ex- 
cellence may  be  popularly  regarded  as  antique,  but  the  link 
that  binds  success  to  them  can  never  be  severed.  Cause 
and  effect  are  connected  by  a  divine  welding. 


GOYERNMENTAL  ARBITRATION. 


"  What  mighty  contests  rise  from  trivial  things  !  " 

Pope. 


"  And  sheathed  their  swords  for  lack  of  argument.'''' 

SUAKESPEAKE. 


"  Beware 

Of  entrance  to  a  quarrel ;  but  being  in, 

Beaft  that  the  opposed  may  beware  of  theey 

Ibid. 


"  Thy  head  is  as  full  of  quarrels  as  an  egg  is  full  of  meaty 

Ibid. 


'^  I  icon'' t  quarrel  with  my  bread  and  butter."' 

Swift. 


X. 

GOVERNMENTAL  ARBITRATION. 

The  freedom  of  individual  contract  is  the  chief  corner- 
stone in  the  structure  of  any  system  of  liberal  government. 
It  is  something  that  must  be  accorded  and  guaranteed  to 
every  citizen,  whether  he  be  high  or  low,  rich  or  poor, 
employer  or  employee.  Any  legislation,  or  even  prevailing 
custom,  which  tends  to  its  impairment,  is  tyrannous.  The 
greatest  danger  of  the  present  time  lurks  in  new  forms  of 
despotism  imposed  in  the  guise  of  humanity  and  philan- 
thropy. The  laboring  man  has  more  to  apprehend  from 
special  legislation  —  ostensibly  in  his  behalf  —  than  any 
one  else.  However  plausible  new  legislative  departures 
may  seem  to  him  in  their  inception,  their  ultimate  working 
produces  hardship.  His  real  interest  demands  free  con- 
ditions, prevailing  confidence,  and  general  prosperity.  To 
create  demand  for  labor,  there  must  be  some  inducement 
for  starting  new  enterprises,  and  the  extension  of  those 
already  founded.  Men  of  means  will  not  embark  in  busi- 
ness with  the  prospect  before  them  of  interminable  friction, 
or  if  the  State,  in  response  to  demagogic  demand,  proposes 
to  take  control  of  their  business  and  deny  them  the  right 
of  free  contract. 

During  the  last  few  years,  many  States  have  made 
provision  for  tribunals  of  arbitration,  whose  business  is  the 
settlement  of  disputes  and  controversies  between  employers 
and  employees.  These  provisions  for  the  machinery  of 
arbitration  vary  somewhat  in  detail,  but  are  similar  in 
general  plan  and  operation.     General  experience  up  to  this 

117 


118        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

time  confirms  the  conclusion  that  no  practical  or  perma- 
nent benefit  can  be  expected  from  legal  arbitration  as  a 
State  system.  It  may  be  of  some  use,  morally,  as  a  tem- 
porary expedient  to  bridge  over  chasms  of  active  hostility, 
or  for  emergencies  when  reason  has  lost  its  sway ;  but  it 
is  useless  as  a  means  for  the  permanent  settlement  of 
differences  continually  arising  between  capital  and  labor, 
while  they  occupy  their  present  artificial  and  antagonistic 
attitude.  Courts  are  already  organized,  and  laws  in  force, 
to  construe  and  enforce  existing  contracts ;  but  the  prov- 
ince assumed  by  these  tribunals  (at  least  in  some  States) 
of  making  new  contracts  between  citizens,  and  of  fixing 
prices  other  than  those  established  by  supply  and  demand, 
is  a  novel  and  unwarranted  advance  in  the  direction  of 
paternal  government. 

What  manufacturer  can  possibly  have  any  security  in 
engaging  in  business,  if  he  be  debarred  from  the  natural 
right  and  freedom  of  hiring  labor  at  its  market  price,  or  at 
a  rate  offered  by  those  who  are  willing  to  sell  ?  It  is  evi- 
dent that  no  person  or  corporation  will  permit  the  State 
to  transact  their  business  for  them ;  and  if  the  State  insists 
upon  so  doing,  then  business  must  come  to  an  end.  As 
well  have  a  State  board  to  determine  the  natural  or 
proper  market  price  for  potatoes,  clothing,  or  dentistry. 
These  are  the  product  of  labor ;  and  if  the  value  of  labor  is 
to  be  arbitrarily  fixed  by  the  State,  the  same  logic  requires 
its  application  to  them.  During  the  French  Revolution 
there  was  an  attempt  to  do  this  impossible  thing.  Even  if 
this  were  a  proper  function  for  this  court,  it  is  evident 
that  in  order  to  arrive  at  intelligent  decisions,  it  must 
adopt  rules  and  methods  of  procedure  like  a  court  of 
equity  ;  that  is,  it  must  call  in  witnesses  on  both  sides,  and 
make  up  a  verdict  on  the  weight  of  evidence.  It  is  also 
plain  that  even  if  the  State  usurped  the  right  to  make 
arbitrary  contracts  and  prices  between  citizens,  regardless 


GOVERNMENTAL   ARBITHATION  119 

of  natural  or  market  values,  no  board  could  possibly  judge 
intelligently  of  the  great  variety  of  occupations,  conditions, 
and  questions  that  would  come  before  it.  It  might  be  able 
and  honest ;  but  in  addition,  it  would  be  necessary  for  its 
members  to  be  universal  experts.  No  two  cases  would  be 
alike.  It  woidd  not  be  simply  a  question  of  law  and  prin- 
ciple, or  right  or  wrong  ;  but,  rather,  of  materials,  qualities, 
markets,  credits,  competition,  expenses,  and  many  other  ele- 
ments which  would  all  have  a  bearing.  Aside,  then,  from  its 
strained  and  unnatural  jurisdiction,  it  would  be  a  physical 
and  mental  impossibility  for  any  board  to  grapple  with 
such  a  variety  of  problems  as  would  come  before  it. 

Voluntary  arbitration  is  of  value  in  its  proper  sphere, 
but  the  fixing  of  prices  and  forcing  them  upon  an  unwilling 
purchaser  is  coercive.  In  the  interpretation  and  enforce- 
ment of  existing  contracts  arbitration  is  often  quicker,  less 
expensive,  and  more  satisfactory  than  the  regular  process 
of  law ;  but  its  adoption  must  be  voluntary  on  both  sides. 
The  time-honored  method  of  settling  disputes  by  each  party 
choosing  one  who  is  familiar  with  the  conditions,  and  they 
choosing  the  third,  the  three  then  acting  together  to  make 
a  just  settlement,  is  a  commendable  way  of  adjusting  differ- 
ences without  requiring  the  intervention  of  a  State  board. 

Conciliation,  however,  is  more  useful  than  arbitration. 
There  is  an  important  difference  between  them.  The  former 
may  be  employed  regardless  of  State  law,  and  is  always 
mutually  voluntary.  Often  all  that  is  necessary  to  settle 
serious  disputes  is  the  assistance  of  conciliators  who  possess 
the  confidence  and  esteem  of  both  parties.  They  also  should 
have  a  thorough  knowledge  of  all  the  details  and  peculiari- 
ties of  the  special  business,  such  as  would  be  impossible 
with  any  State  board.  By  such  means  angry  feelings  and 
prejudices  may  often  be  subdued,  and  reason  and  good  sense 
brought  to  the  front.  When,  in  a  conciliatory  spirit,  those 
who  differ  can  be  brought  to  sit  around  the  same  table  and 


120         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

reason  together  in  a  friendly  way,  differences  rapidly  dis- 
appear. This  would  not  often  be  the  result  of  formal  arbi- 
tration, which  has  the  character  of  a  court  of  law,  in  the 
fact  that  each  side  is  arrayed  against  the  other.  Arbitra- 
tion, in  the  proper  sense  of  the  word,  must  proceed  under 
statutory  or  judicial  authority.  Even  when  both  parties 
enter  into  it  voluntarily,  they  must  relinquish  their  freedom 
to  a  great  extent  by  consenting  in  advance  to  accept  the 
award  of  the  arbitrators,  so  as  to  enable  it  to  be  judicially 
enforced.  This  gives  it  essentially  the  character  of  a  court 
of  law,  with  all  its  incidental  antagonism  and  bitterness. 
If  it  have  not  these  features,  it  is  in  reality  conciliation,  and 
not  arbitration. 

As  long  as  the  present  strained  and  opposing  relations 
exist  between  capital  and  labor,  disputes  and  controversies 
will  be  numerous  and  bitter.  Any  ostensible  settlement  of 
them  by  boards  of  arbitration  will  only  be  a  brief  truce, 
rather  than  a  treaty  of  peace.  Under  the  head  of  concilia- 
tion is  included  all  that  is  voluntary,  friendly,  reasonable, 
and  fair  in  its  character ;  and  its  possibilities  for  usefulness 
are  great.  Arbitration  which  must  take  account  of  the 
legal,  opposing,  and  two-sided  phases  of  a  question,  is  well- 
nigh  valueless  for  permanent  results.  There  is  much  of  the 
combative  element  in  hviman  nature ;  and  instead  of  stimu- 
lating it  to  greater  activity,  it  should  be  counteracted  and 
subdued  by  other  qualities  which  are  just  as  inherent  in 
man's  constitution.  Only  by  such  means  can  the  different 
elements  of  society  be  united  and  harmonized. 


ECONOMIC   LEGISLATION   AND   ITS 
PROPER   LIMITS. 


"  There  shall  be,  in  England,  seven  ha{f-penny  loaves  sold  for  a 

penny  :  the  three-hooped  pot  shall  have  ten  hoops  ;  and  I  will  make 

it  felony  to  drink  small  heery 

King  Henry  VI. 

"0/  it  is  excellent 

To  have  a  gianVs  strength;  but  it  is  tyrannous 

To  use  it  like  a  giant.'''' 

Measure  for  Measure. 

"  Let  us  a  little  permit  Nature  to  take  her  own  way ;  she  better 

understands  her  own  affairs  than  we." 

Montaigne. 

"  For  Where's  the  state  beneath  the  firmament 
That  doth  excel  the  bees  for  government  ?  " 

Du  Bartas. 


XI. 

ECONOMIC   LEGISLATION  AND   ITS  PROPER 
LIMITS. 

To  what  extent  the  State  may  properly  interfere  with 
the  industrial  freedom  of  its  citizens  is  a  difficult  and 
many-sided  question.  We  shall  not  attempt  to  answer  it 
in  detail,  but  rather  indicate  certain  general  principles 
deducible  from  Natural  Law,  as  a  guide  to  its  solution. 
The  goal  to  be  reached  is  the  greatest  good  for  the  greatest 
number ;  and  natural  principles  are  the  finger-boards  that 
point  out  the  way. 

It  is  obvious  that  as  modern  civilization  becomes  more 
complex,  population  denser,  and  inventions  and  improve- 
ments more  numerous,  the  scope  of  legislation,  especially 
municipal,  widens.  The  modern  city,  in  many  respects, 
is  a  great  copartnership.  Some  sentimentalists  hail  muni- 
cipal drainage,  water-works,  lighting,  and  possible  rapid 
transit  as  successive  steps  in  socialism.  They  are,  how- 
ever, only  the  wise  business  methods  of  a  great  corporation. 
Circumstances  make  them  expedient,  but  their  purpose  is 
not  to  absorb  private  interests  but  to  render  them  aid. 
The  municipality  can  economically  supply  the  citizen  with 
water  and  light  without  the  least  impairment  of  his  per- 
sonal rights  or  privileges.  With  the  growth  of  cities  and 
profusion  of  inventions,  an  increasing  number  of  functions 
can  be  performed  by  public  administration.  This  is  espe- 
cially true,  where,  in  services  like  those  before  mentioned, 
unlimited  private  competition  is  not  practicable.  The  sup- 
ply of  water  and  light  in  a  municipality  involves  the  use 

123 


124        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

of  the  public  streets,  which  makes  it  a  local,  natural  monop- 
oly. Therefore,  if  not  owned  by  the  city,  it  must  at  least 
be  regulated  by  it. 

But  any  enlargement  of  public  functions  within  the 
limit  of  practical  private  management  increases  opportuni- 
ties for  official  waste,  political  corruption,  rings,  and  spoils, 
with  all  their  incidental  demoralization.  If  the  average 
city  alderman  and  councilman  were  thoroughly  expert  and 
also  conscientious  and  incorruptible,  the  question  would  be 
considerably  modified.  Even  within  its  present  limits  the 
public  service  in  most  cities  is  shamefully  defective. 

As  fundamental  principles  we  may  conclude  first,  that 
the  State  should  not  interfere  in  any  enterprise  that  may 
be  as  efficiently  carried  on  by  private  control ;  and  second, 
that  it  should  leave  all  questions  of  prices,  rates,  wages,  and 
hours,  to  the  natural  regulation  of  free  and  untrammelled 
conditions. 

Under  the  first  of  these  propositions,  let  us  note  a  few 
of  the  disadvantages  of  governmental  management  as  com- 
pared with  that  of  individuals  or  private  corporations. 

]\Iany  examples  will  occur  to  the  mind  of  an  impartial 
inquirer,  showing  the  superior  excellence  and  frugality  of 
private  administration  over  municipal.  State,  or  national. 
The  advantage  is  apparent,  and  usually  involves  not  only 
cost,  but  efficiency  and  thoroughness  in  management  and 
execution.  For  example,  the  public  buildings  of  the 
United  States,  built  by  governmental  or  political  organiza- 
tions, on  an  average  have  cost  vastly  more  than  if  erected 
under  private  management.  It  does  not  follow  that  this 
difference  is  always  the  result  of  dishonesty  or  mismanage- 
ment. It  is  in  the  nature  of  things  ;  or,  in  other  words,  in 
accordance  with  Natural  Law.  The  more  close  and  direct 
the  connection  between  the  investor  and  the  investment, 
the  greater  will  be  the  economy  and  efficiency;  and  the 
more  indirect  and  remote  from  the  contributor  or  tax-payer 


ECONOlVnC   LEGISLATION  AND  ITS   PROPER   LIAUTS.    125 

the  expenditure,  the  greater  will  be  the  waste,  mismanage- 
ment, and  extravagance.  It  would  seem  that  those  persons 
who  are  advocating  governmental  management  for  railroads 
and  telegraphs  must  be  blind  to  these  laws,  and  to  the 
teaching  of  experience.  Take  a  great  railroad  system,  the 
successful  management  of  which  requires  the  highest  grade 
of  executive  talent,  put  it  under  the  control  of  politicians 
of  the  dominant  party,  and  the  result  may  be  easily  ima- 
gined. In  proportion  as  the  domain  of  State  administra- 
tion is  widened,  the  amount  of  "  spoils,"  already  too  large, 
is  increased ;  and  these  would  be  fought  over  under  such  a 
plan  by  politicians  after  every  election.  Divorce  politics 
from  any  industrial  enterprise,  and  a  long  step  is  taken  in 
the  direction  of  doing  business  on  business  principles.  In 
the  face  of  these  undeniable  facts,  is  it  not  strange  that 
intelligent  men  urge,  with  evident  sincerity,  that  the  incu- 
bus of  national  and  political  control  be  fastened  upon  many 
kinds  of  business  now  efficiently  conducted  by  private  and 
corporate  administration  ?  It  is  evident  that  demagogism 
is  the  real  foundation  of  many  efforts  in  this  direction.  It 
is  expected,  as  a  matter  of  course,  that  when  a  city  hall, 
court  house,  State  house,  or  custom  house  is  built,  the  ex- 
pense will  be  much  greater,  and  the  utility  less,  than 
would  be  the  case  if  the  same  were  done  by  private  enter- 
prise. Official  methods  are  extravagant,  and  operations 
under  them  are  so  hampered  by  "red  tape"  that  they 
lack  directness  and  efficiency.  Rings,  combinations,  and 
favoritism  are  incidental  to  all  such  transactions.  The 
opportunity  for  these  abuses  is  much  greater  under  our 
democratic  form  of  government  than  with  the  nations  of 
the  Old  World,  whose  powers  are  more  centralized.  There 
the  civil  service  is  more  a  matter  of  business  and  less  of 
politics,  and  the  administration  of  affairs  is  not  continually 
changing.  The  necessary  sphere  of  such  governmental 
action  among  us  is  limited  to  those  enterprises  which,  from 


126        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

their  public  nature,  are  beyond  private  control.  In  general, 
the  rule  of  laisser  /aire  has  been  the  policy  of  our  govern- 
ment in  the  past,  and  under  it  we  have  greatly  prospered. 
The  threatening  evil  of  the  present  time  is  excessive  eco- 
nomic regulation. 

The  second  department  of  detrimental  legislation  named 
consists  in  the  efforts  to  fix  prices  and  rates,  which  in  the 
end  must  inevitably  be  regulated  by  the  law  of  supply  and 
demand.  This  means  a  conflict  between  legislative  and 
natural  law.  It  may  at  first  appear  that  some  legislation 
of  this  kind  would  be  beneficial,  especially  as  applied  to 
railroads.  Whether  or  not  correctly,  the  courts  have  de- 
cided in  favor  of  the  legality  of  State  and  national  regula- 
tion of  the  rates  of  freight  and  passenger  service.  As  this 
decision  must  be  accepted,  the  only  question  remaining  is 
that  of  expediency.  It  is  urged  that  railroads  are  public 
highways,  and  that  they  have  special  privileges  granted  by 
their  charters ;  and  for  these  reasons  they  should  be  subject 
to  governmental  control.  Quite  an  extensive  test  of  this 
policy  was  made,  a  few  years  since,  by  the  enactment,  in  a 
few  of  the  western  States,  of  what  were  known  as  "  granger 
laws."  Experience  has  shown  that  these  laws  were  not 
only  useless,  but  an  injury  to  the  public.  It  was  only 
another  of  the  oft-repeated  attempts  to  substitute  the  arti- 
ficial for  the  natural.  Without  State  interference,  business 
policy  and  competition  are  each  constantly  forcing  the  rates 
for  service  towards  the  normal  standard,  or  to  such  a  point 
as  is  natural  and  fair.  Take,  for  instance,  the  worst  sup- 
posable  case,  —  that  of  a  road  without  any  apparent  compe- 
tition, either  by  land  or  water.  The  popular  estimate  of 
such  a  road  is  that  it  is  a  perfect  "  monopoly,"  and  that  its 
policy  and  interest  will  naturally  cause  it  to  make  a  tariff 
of  high  rates.  A  more  careful  examination  of  the  case  will 
show  that  it  is  against  the  true  financial  policy  of  even 
such  a  road  to  establish  its  rates  above  a  fair  standard. 


ECONOMIC   LEGISLATION   AND   ITS   PROPER   LIMITS.    127 

Normal  rates  attract,  foster,  and  increase  both  business  and 
profits.  Such  a  road,  to  be  profitable,  must  adopt  a  policy 
that  will  encourage  the  location  of  manufactures,  the  devel- 
opment of  agriculture,  and  the  thorough  settlement  of  the 
tributary  territory.  Sagacious  railroad  managers  are  learn- 
ing that  a  large  business  at  normal  rates  is  far  more  profita- 
ble than  a  restricted  traffic  under  a  high  tariif.  In  other 
words,  they  cannot  afford  to  fix  rates  above  the  normal  any 
more  than  below  it.  It  is  no  doubt  true  that  the  managers 
of  many  roads  have  not  fully  realized  the  application  of 
this  general  law ;  but  as  both  experience  and  observation 
are  persistent  teachers,  the  tendency  is  constantly  in  the 
direction  of  a  normal  standard.  In  numerous  instances, 
roads  have  voluntarily  reduced  their  rates,  thereby  realiz- 
ing as  a  direct  result  an  increase  of  business  and  profits. 
As  equipments  and  appliances  have  become  more  perfect, 
natural  rates  have  steadily  declined,  and  will  continue  to 
do  so,  regardless  of  legislation.  Every  reduction  brings  a 
great  and  unexpected  increase  of  business.  The  problem 
before  every  railroad  manager  is  to  find  as  nearly  as  possi- 
ble the  normal  basis ;  for  in  the  end,  that  is  the  most  prof- 
itable. In  proportion  as  tariffs  are  removed  from  it,  either 
above  or  below,  profits  decrease.  Artificial  restrictions  pre- 
vent the  increase  of  competition  and  discourage  the  build- 
ing of  new  roads,  as  some  of  the  "  granger  States  "  found 
to  their  sorrow,  after  the  adoption  of  their  "cast-iron" 
regulations. 

About  fifty  years  ago,  "assize  laws"  were  enacted  in 
New  York  and  some  other  cities,  regulating  the  price  and 
weight  of  loaves  of  bread,  based  on  the  price  of  flour. 
After  a  trial,  which  was  attended  with  much  trouble  and 
expense,  in  consequence  of  the  necessity  for  numerous  in- 
spectors, the  laws  were  repealed.  Besides  the  saving  of 
expense,  it  was  found  that  natural  competition  between 
bakers  was  much  more  effectual. 


1 28        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

The  old  usury  laws  funiisli  another  notable  example  of 
attempts  to  fix  artificial  prices.  They  were  more  of  an 
injury  to  the  borrower  than  to  the  lender.  As  well  regu- 
late the  height  of  the  tides  by  statute.  When  the  artificial 
comes  squarely  in  conflict  with  the  natural,  the  latter  will, 
sooner  or  later,  surely  triumph. 

A  striking  instance  of  misapplied  legislation  is  seen  in 
statutes,  existing  and  proposed,  to  regulate  the  hours  of 
labor.  These  have  been  advocated  and  urged  by  so-called 
labor  reformers  and  by  labor  organizations.  They  have 
brought  a  very  strong  pressure  to  bear  on  legislators  in 
favor  of  these  measures.  When  we  look  beneath  the  sur- 
face, and  see  their  real  effect,  we  can  only  be  surprised  that 
working-men  are  so  blind  to  their  own  interests.  Time  is 
the  one  thing  that  all  share  alike.  Unlike  nearly  every- 
thing else,  the  poor  have  the  same  amount  as  the  rich.  It 
is,  in  fact,  the  capital  of  the  laboring  man.  By  Natural 
Law,  he  has  his  full  time  to  dispose  of  as  he  may  think 
best.  But  when  he  asks  for  an  artificial  law,  which  forcibly, 
under  all  circumstances,  will  deprive  him  of  the  use  of 
a  portion  of  his  own  productive  power,  as  by  an  "  eight- 
hour  law,"  he  diminishes  by  so  much  his  available  reserve 
and  renders  himseK  poorer.  This  is  the  real  sum  and  sub- 
stance of  restrictive  legislation  regarding  hours  of  labor, 
whenever  applied  to  adults.  How  unfortunate  that  Amer- 
ican citizens  should  be  so  blind  to  their  own  interests  as 
to  deliberately  beg  to  have  their  liberty  and  capital  taken 
from  them !  If  legal  enactments  be  needed  to  prevent 
men  from  selling  their  time  when  they  wish,  it  would  logi- 
cally follow  that  the  State  should  control  their  eating  and 
drinking,  and  prescribe  their  wearing  apparel.  It  is  a 
reflection  upon  the  intelligence  of  the  masses  of  the  people 
to  suppose  that  we  have  any  considerable  number  of  adult 
citizens  who  are  so  ignorant  that  they  cannot  decide  for 
themselves  how  much  to  work.     Moreover,  if  their  physical 


ECONOMIC  LEGISLATION  AND   ITS   PROPER  LIMITS.    129 

welfare  were  promoted  by  shorter  hours  the  decisioa  should 
be  voluntary.  If  the  eight-hour  law  prevailed  here  and 
not  in  European  countries,  our  manufacturers  could  not 
compete  with  theirs  in  the  markets  of  the  world.  More 
workmen,  too,  would  be  attracted  to  our  shores  in  hopes  of 
an  easier  time.  And  both  these  causes  would  force  down 
wages. 

Legislation  in  regard  to  the  frequency  of  payment  of 
wages  is  clearly  superfluous,  though  perhaps  harmless,  ex- 
cept as  a  precedent.  Every  unnecessary  enactment  decreases 
the  respect  for  law,  and  lowers  the  estimation  of  its  justice 
and  impartiality. 

The  general  demand  for  the  widening  of  legislative 
functions  arises,  doubtless,  from  a  vague  though  baseless 
idea  that,  by  some  additional  enactments,  evils  which  really 
come  from  defective  character  can  be  corrected  by  the 
magic  of  legislation.  For  this  reason,  an  effort  is  made  to 
correct  every  petty  grievance  by  additional  law-making. 
Prosperity  is  expected  through  some  legal  panacea,  instead 
of  by  economy  and  industry.  The  present  time  is  prolific 
of  those  so-called  political  economists  who  advocate  new 
and  unique  additions  to  our  already  overburdened  code. 
Ignorance  of  the  first  principles  of  political  science  can 
only  give  rise  to  such  visionary  theories.  The  "  reformers  " 
assume  that  all  employers  are  blindly  selfish,  and  wish  to 
lengthen  hours  and  depress  wages.  On  the  contrary,  it  is 
for  the  interest  of  every  employer  to  pay  good  wages  and 
make  as  short  hours  as  competition  and  the  nature  of  the 
business  will  warrant.  Only  by  such  a  course  can  he  retain 
his  best  help  and  get  the  highest  quality  of  production. 

Business  prospers  in  the  absence  of  legal  interference, 
except  to  simply  provide  for  justice  and  freedom. 

It  is  true  that  the  complex  arrangements  of  modern 
civilization  require  State  intervention  in  some  ways  un- 
necessary under  more  primitive  conditions.     The  factory 


130        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

legislation  of  England,  and  similar  enactments  in  some  of 
our  States,  are  examples.  An  excess  of  liberty  to  some 
individuals  may  prove  a  tyranny  to  others.  As  the  good 
of  society  is  more  important  than  the  possible  advantage 
of  one  of  its  fractional  parts,  the  operations  of  the  few 
must  be  restricted  when  they  encroach  upon  the  liberty  of 
the  many.  In  other  words,  the  natural  law  of  liberty,  as 
applied  to  society,  is  higher  than  that  pertaining  to  the 
individual ;  and  while  they  are  not  in  opposition,  the  lower 
is  modified  by  it.  Thus  human  law  should  indorse  and 
supplement  Natural  Law  by  restricting  private  will  when 
it  conflicts  with  the  will  of  society.  This  is  compatible 
with  the  greatest  average  freedom  for  all.  The  primary 
obligation  of  the  State  is  in  the  exercise  of  what  are 
usually  known  as  police  powers.  There  are  a  variety  of 
other  functions  more  or  less  intimately  connected  with 
these  duties  of  protection  to  person  and  property.  We  ex- 
pect the  State  to  enforce  our  contracts,  regulate  our  sani- 
tary conditions,  prevent  and  punish  frauds,  abate  nuisances, 
and  ward  off  general  evils  so  far  as  is  possible. 

Among  the  examples  of  factory  legislation  which  seem 
wise  and  proper  is  State  interference  in  behalf  of  children 
whose  parents  or  guardians,  through  motives  of  cupidity, 
will  not  protect  them  from  overwork.  The  same  restric- 
tions in  regard  to  an  adult  would  be  superfluous,  for  he  is 
responsible  and  supposed  to  be  able  to  judge  correctly  as  to 
what  is  best  for  himself.  Besides,  if  he  be  restricted  in 
hours,  it  might  mean  for  him  less  food  and  clothing  and  a 
poorer  home.  Wholesome  regulations  relating  to  fire- 
escapes,  sanitary  inspection,  foul  air,  the  fencing  of  dan- 
gerous machinery  and  elevator  wells,  are  proper  and 
necessary.  They  encroach  upon  no  man's  liberty,  and 
private  enterprise  cannot  always  be  relied  upon  to  regulate 
them.  Individual  cupidity  and  neglect  must  be  controlled 
by  public  supervision.     Personal  will  must  be  subservient 


ECONOMIC   LEGISLATION   AND   ITS   PROPER   LIMITS.    131 

to  collective  will.  Individual  freedom  might  lead  to  the 
location  of  a  powder-mill  or  a  glue  factory  in  a  thickly 
settled  street,  unless  it  were  restrained  by  collective  free- 
dom. It  is  obviously  within  the  province  of  the  State  to 
appoint  boards  of  health,  and  sanitary  inspectors,  whose 
duties  shall  include  the  supression  of  contagious  and  epi- 
demic diseases,  and  the  protection  of  air  and  water  from 
pollution  and  contagion.  As  it  is  impossible  for  individuals 
to  be  universal  experts,  it  is  also  necessary  to  have  govern- 
ment inspectors  to  test  weights  and  measures,  to  detect 
adulterations  in  foods  and  chemicals,  and  also,  in  some 
cases,  to  brand  those  articles  of  commerce  whose  quality  or 
quantity  cannot  be  verified  by  ordinary  observation.  Organ- 
ized government  has  the  power  to  aid  and  supplement  the 
wisdom  of  the  individual,  without  in  any  way  restricting  his 
independence,  or  deadening  the  competitive  and  elastic  forces 
of  the  business  world.  The  boundary  line  between  State  in- 
tervention and  individual  enterprise  must,  to  a  certain  ex- 
tent, be  determined  by  a  wise  expediency ;  but  the  great  end 
to  be  sought  is,  that  private  enterprise  and  competition  shall 
be  left  unhampered.  Any  unnecessary  dependence  on  the 
government  for  objects  obtainable  by  private  efforts  is  so 
clearly  a  violation  of  Natural  Law  that  bad  results  are  sure 
to  follow. 


DEPENDENCE  AND   POYERTY. 


"  Practise  yourself,  for  Heaven's  sake,  in  little  things  ;  and  thence 

proceed  to  yreater.'^  I 

Epictetus.  I 

"  Honor  ajid  shame  from  no  condition  rise; 
Act  well  your  part,  there  all  the  honor  iies." 

Pope. 

I 
"  The  poor  always  ye  have  with  you.''''  \ 

John  xii.  8. 

! 
"  Teach  every  man  to  spurn  the  rage  of  gain  ;  \ 

Teach  him  thai  states  of  native  strength  possessed. 
Though  very  poor,  may  still  be  very  fciess'd."  I 

Goldsmith.  ! 

I 
"  To  a  close-shorn  sheep  God  gives  wind  by  measure.''^  ; 

"  Help  thyself  and  God  will  help  theey  , 

Herbert. 

"  The  poor  must  be  wisely  visited  and  liberally  cared  for,  so  that 
mendicity  shall  not  be  tempted  into  mendacity,  nor  want  exasperated        l 
into  crimed 

BOBERT  C.  WiNTHROP.  j 

J 

"  Let  not  thy  mind  run  on  that  thou  lackest  as  much  as  on  what       ^ 

thou  hast  already. ^^  | 

Marcus  Aurelius.  } 

"  There  is  nothing  either  good  or  bad,  but  thinking  makes  it  so.''^ 

Shakespeare. 

'^^  Blessed  is  he  that  considereth  the  poor.'' 

Psalm  xli.  1. 


XII. 

DEPENDENCE  AND  POVERTY. 

The  terrible  degradation,  vice,  and  poverty  which,  pre- 
vail, especially  in  the  slums  of  our  large  cities,  furnish  a 
difficult  social  problem  for  solution.  That  the  vast  ma- 
jority of  the  victims  of  these  conditions  is  composed  of 
the  unassimilated  alien  element  is  well  known.  But  racial 
differences  alone  do  not  account  for  the  great  contrast. 
The  native  citizen  has  a  much  greater  inborn  independence 
of  character.  He  may  be  equally  poor  and  uneducated,  but 
he  will  put  forth  herculean  efforts  to  avoid  falling  into  a 
condition  of  dependency.  For  generations  he  has  been  self- 
reliant  and  self-respecting.  On  the  contrary,  the  traditional 
paternalism  of  European  monarchies  is  reflected  in  the  char- 
acter of  the  immigrant.  He  has  looked  upon  his  govern- 
ment as  an  institution  to  lean  upon,  and  it  is  difficult  for 
him  to  grasp  the  spirit  of  Americanism.  Thus  a  certain 
proportion  of  foreign  immigrants,  without  much  resistance 
on  their  own  part,  settle  down  into  low  physical,  mental, 
and  moral  conditions.     Their  specific  gravity  is  weak. 

While  no  graphic  descriptions  of  the  deplorable  condi- 
tions existing  in  our  very  midst  can  equal  the  reality,  there 
is  a  deeper  question  involved,  as  to  the  effect  and  utility  of 
holding  such  delineations  continually  in  the  public  gaze. 
Many  well-meaning  and  conscientious  philanthropists  have 
given  us  volumes  of  appalling  detail  of  the  "  social  cellar," 
hoping  thereby  to  arouse  public  sentiment  so  that  some 
radical  and  effective  remedial  measures  would  be  inaugu- 

135 


136        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

rated.  Lacking,  as  tliey  do,  a  full  recognition  of  law,  these 
writers  work  in  the  illusive  light  of  a  mistaken  mental 
philosophy.  Instead  of  arousing  the  public  mind  they 
harden  it.  The  human  mentality  is  so  constituted  that  the 
iteration  and  reiteration  of  these  "  tales  of  woe "  finally 
cause  the  things  depicted  to  be  taken  as  a  matter  of  course. 
Instead  of  being  regarded  as  abnormal  conditions  to  be 
cured,  they  come  to  be  accepted  as  inevitable  and  hopeless. 
The  real,  though  by  no  means  the  intended  influence  of 
these  graphic  pictures  of  the  nether  side  of  humanity,  is 
pessimistic  and  discouraging.  To  magnify  abuses  until 
they  seem  to  be  the  rule,  is  to  promote  them.  In  varying 
form  the  old  question  of  realism  vei^sus  idealism  is  ever 
cropping  out.  Shall  the  worst  or  the  best  be  made  of  exist- 
ing conditions?  We  take  direct  issue  with  the  host  of 
noble  men  and  women  who,  with  the  best  of  intentions  and 
with  artistic  skill,  have  drawn,  framed,  and  hung  up  vivid 
pictures  of  human  misery.  Pessimistic  realism  contains 
no  element  of  cure.  Such  has  been  the  conventional  and 
largely  the  ecclesiastical  way  of  dealing  with  evil,  moral 
and  social,  for  centuries,  and  little  advance  has  been 
made.  It  has  been  thought  that  to  hold  up  the  abnormal, 
turn  it  about  in  the  light  and  analyze  it,  would  effectually 
make  it  detestable.  It  has  rather  made  it  familiar  and 
expected.  The  invisible  powers  of  thought  and  suggestion, 
of  which  the  great  majority  are  unconscious,  are  active  in. 
sociology  as  elsewhere.  It  may  be  thought  to  be  outside 
the  scope  of  this  study,  but  it  is  nevertheless  true  that  by 
psychological  law,  conditions  which  are  widely  lodged  and 
spread  out  in  the  public  mind  tend  to  externally  actualize 
themselves.  There  is  almost  such  a  process  as  thinking 
things  into  existence,  and  this  most  of  all  when  they  are 
not  wanted.  The  more  the  animalism  of  mankind  is  put 
on  exhibition,  the  more  its  corresponding  unisons  vibrate 
within.     The  same  principle  is  seen  in  politics.     The  gen- 


DEPENDENCE  AND  POVERTY.         137 

eral  suspicion  and  assumption  of  motives  of  self-seeking 
which  are  focused  upon  every  one  in  political  life  is  appall- 
ing. No  difference  how  conscientious  a  man  may  be,  a 
deluge  of  low  insinuations  is  poured  upon  him.  Is  patri- 
otism dead  ?  If  not,  it  survives  in  spite  of  those  who  see 
the  worst  in  every  man,  thing,  and  system. 

You  would  not  wish  your  family  to  frequent  the  slums 
in  real  life,  and  if  so,  it  is  better  not  to  do  it  in  books. 
Pope's  familiar  lines  regarding  ''  vice  "  contain  the  germs 
of  a  whole  system  of  philosophy.  Shall  all,  then,  avoid 
the  slums  for  fear  of  contamination  ?  Exactly  the  reverse 
in  the  case  of  every  one  who  will  go  with  any  intelligent 
aid.  Let  those  go  who  are  able  to  discover  there  a  little 
that  is  good  for  a  foundation.  There  is  a  trace  of  whole- 
someness  everywhere ;  and  where  there  is  a  minimum,  it  is 
of  the  highest  importance  that  that  little  be  recognized, 
stimulated,  and  made  the  basis  of  more.  The  slums  are 
already  dark  with  pessimism,  and  require  nothing  so  much 
as  a  flood  of  optimism.  They  need  cheer  and  hope.  Con- 
dolence and  sentimental  sympathy  so  profusely  offered 
should  be  replaced  by  encouragement.  Emphasize  the  one 
talent  they  have,  and  this  will  bring  five  or  ten  into  mani- 
festation. 

The  pessimist  has  eyes  only  for  the  worst,  and  his  pres- 
ence is  a  black  pall.  The  scientific  way  to  cope  with  nega- 
tive conditions  is  to  displace  them  with  positives.  To  hold 
up  before  any  one  his  degradation,  poverty,  or  ignorance, 
is  to  impress  them  more  deeply  upon  him.  The  inhabitants 
of  the  slums  need  hope  as  much  as  food  or  fuel ;  in  fact, 
the  very  lack  of  it  is  mainly  responsible  for  their  present 
condition.  Every  unfortunate  has  at  least  some  small  solid 
spot  to  build  from. 

There  are  still  a  few  healthful  germs  in  the  darkness  of 
the  social  cellar,  and  svinshine,  air,  and  cultivation  will 
make  them  sprout  and  grow.     As  the  oak  lies  enwrapped 


138        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

in  the  acorn,  so  ideal  possibilities  are  latent  in  all  sorts  and 
conditions  of  men.  In  the  light  of  evolution,  low  grades 
are  only  such  relatively. 

In  proportion  as  mind  becomes  pure  and  wholesome,  hab- 
itations and  environment  are  transformed  as  a  resultant 
correspondence.  Moral,  social,  economic,  and  hygienic  edu- 
cation in  individual  character  is  the  urgent  necessity.  If, 
without  these,  the  population  of  the  slums  of  New  York 
were  moved  into  the  palaces  of  Fifth  Avenue,  the  improve- 
ment would  be  more  superficial  than  real.  Model  houses 
for  the  poor  are  good,  but  their  faultless  qualities  can  be 
maintained  only  from  within.  The  charity  demanded  by 
the  times  is  not  so  much  an  infusion  of  dollars  as  of  moral 
and  industrial  training,  together  with  the  inspiration  of 
hope,  ambition,  and  independence.  This  necessity  is  be- 
coming widely  recognized ;  and  university  settlements,  in- 
dustrial, technical,  and  cooking  schools,  kindergartens  and 
missions,  are  being  multiplied.  While  pessimism  paralyzes, 
optimism  gives  new  life.  Charity  is  being  more  intelli- 
gently administered  and  becoming  more  true  to  the  name. 
The  almsgiving  of  the  past  has  largely  been  contrary  to 
Natural  Law  and  often  worse  than  useless. 

Turning  from  the  slums  to  the  broader  applications  of 
Charity,  the  great  need  is  a  scientific,  rather  than  a  senti- 
mental basis.  The  laws  of  dependence  are  as  exact  as  those 
of  chemistry.  The  charitable  societies  of  London  are  far 
more  numerous  and  wealthy  than  those  of  any  other  city, 
and  no  where  else  is  there  such  a  vast  amount  of  abject  and 
hopeless  poverty.  What  is  the  relation  of  these  two  facts ; 
or,  in  other  words,  which  is  the  cause  and  which  effect? 
If  we  study  human  nature  in  the  light  of  Natural  Law  for 
the  solution  of  this  problem,  and  also  observe  carefully  the 
teaching  of  experience,  we  find  that  supply  and  demand 
equal  each  other  here,  as  in  the  domain  of  commerce.  Let 
the  supplies  of  charity  be  doubled  or  quadrupled,  and  the 


DEPENDENCE  AND   POVERTY.  139 

demand  from  dependence  keeps  pace  with  them.  These 
relations  and  sequences,  being  uniform,  prove  that  they  are 
not  a  matter  of  chance,  but  rather  are  governed  by  natural 
and  unvarying  principles.  As  rapidly  as  dependence  can 
find  something  to  depend  upon,  it  will  increase.  In  con- 
trast with  London  is  Paris,  where  racial  conditions  and 
customs  would  lead  us  to  expect  more  and  worse  poverty. 
There  is  instead  much  less,  and  of  a  milder  variety.  The 
French  capital  makes  but  a  moderate  showing  in  charitable 
organizations  when  compared  with  London,  where  the  num- 
ber of  old  and  thoroughly  equipped  benevolent  associations 
is  remarkable.  These  illustrations,  and  similar  ones  which 
might  be  cited,  do  not  prove  that  charity  is  an  evil.  It  is 
misapplied  charity,  which  is  really  not  charity  at  all,  of 
which  the  world  has  been  full,  that  is  out  of  harmony  with 
natural  principles. 

Charity  is  divine,  heaven-born,  the  brightest  and  noblest 
of  all  virtues  ;  but  this  does  not  alter  the  fact  that  so-called 
charity,  misapplied,  breeds  dependence  with  unerring  cer- 
tainty. 

The  diseased,  aged,  and  helpless  are  within  its  sphere, 
and  he  who  has  surplus  wealth  gets  real  sweetness  out  of  it 
by  applying  it  to  lessen  the  misery  and  lighten  the  burdens 
of  this  ever-present  class.  Natural  Law  is  not  uncharitable 
nor  mechanical,  as  some  might  hastily  conclude ;  but  com- 
passionate and  bountiful,  when  not  transgressed  and  defied. 
Benevolence  is  normal,  and  the  hospitals,  asylums,  and  other 
humane  institutions  are  entitled  not  only  to  our  merciful 
regard,  but  we  owe  them  a  debt.  Charity  is  a  natural  qual- 
ity, and  it  would  be  unnatural  not  to  exercise  it.  It  is, 
perhaps,  fortunate  for  society  that  it  has  its  helpless  and 
dependent  class,  for  it  furnishes  an  ample  field  for  the 
exercise  of  the  kindly  and  brotherly  motives  of  man's  nature. 
While  all  these  facts  cannot  be  too  greatly  emphasized,  it 
remains  true  that  every  man  who  has  in  him  the  possibili- 


140         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

ties  of  independence,  is  degraded  by  opportunities  to  lean 
upon  anything  outside  of  himself.  The  contrast  is  the  wid- 
est possible  between  the  results  of  charit}-  exercised  in  its 
true  sphere,  and  those  of  its  abuse,  or  when  applied  outside 
of  its  legitimate  functions. 

The  so-called  paternal  governments  of  Europe  have  in 
them  elements  which  tend  directly  to  add  to  the  numbers 
and  degradation  of  the  dependent  classes,  and  to  make  their 
condition  more  hopeless  and  fixed  in  its  character.  It  is 
just  as  demoralizing  and  destructive  to  a  self-reliant  man- 
hood to  lean  upon  the  State,  as  upon  some  private  organiza- 
tion. A  government  that  upholds  the  rule  of  laisser  faire, 
or  non-interference,  is  that  imder  which  true  manhood  and 
independence  are  best  developed  and  cultivated. 

Mrs.  James  T.  Fields,  in  her  admirable  book,  "  How  to 
help  the  Poor,"  says  :  — 

"  To  teach  the  poor  how  to  use  even  the  small  share  of  goods  and 
talents  intrusted  to  them  proves  to  be  almost  the  only  true  help  of  a 
worldly  sort  which  it  is  possible  to  give  them.  Other  gifts,  through 
the  long  ages  tried  and  foimd  wanting,  we  must  have  done  with. 
Nearly  a  million  of  dollars,  in  public  and  private  charities,  have  been 
given  away  in  one  year  in  Boston  alone;  and  this  large  sum  has 
brought,  by  way  of  return,  a  more  fixed  body  of  persons  who  live 
upon  the  expectation  of  public  assistance,  and  whose  degradation 
becomes  daily  deeper.  The  truth  has  been  made  clear  to  us  that 
expenditme  of  money  and  goods  alone  does  not  alleviate  poverty." 

A  sharp  line  of  demarcation  needs  to  be  drawn  between 
a  poor  man  and  a  pauper.  There  is  little  necessary  resem- 
blance between  poverty  and  pauperism.  The  worst  calam- 
ity that  can  befall  a  poor  man  is  to  become  pauperized. 
He  who  blindly  scatters  money  in  the  name  of  charity  is 
liable  to  do  incalculable  harm.  On  the  other  hand,  he  who 
teaches  one  how  to  help  himself,  and  raises  him  from  the 
dependent  class  into  that  which  is  thrifty,  does  society  and 
humanity  a  great  favor.     Xo  person  of  means  can  discharge 


DEPENDENCE  AND  POVERTY.         141 

liis  obligations  to  society  by  careless  and  indiscriminate 
giving.  Industrial  schools,  and  any  other  aids  that  teach 
the  way  of  self-support,  and  give  the  young  such  a  training 
as  will  put  them  on  their  feet,  deserve  the  most  liberal  sup- 
port and  encouragement.  Help  some  dependant  to  discover 
a  path  of  self-support ;  for  by  this  act  of  real  charity  you 
bring  him  into  harmony  with  Natural  Law,  and  no  gift  of 
money  could  equal  that  favor.  The  knowledge  of  something 
to  fall  back  upon  in  the  future,  outside  of  one's  own  exer- 
tion, causes  improvidence  in  the  present.  The  tramp  who 
knows  that  charity  and  the  soup-house  are  in  readiness  for 
him  when  winter  comes,  will  not  put  forth  much  effort  to 
find  employment  during  the  summer  and  autumn. 

It  is  not  within  the  province  oi  this  book  to  present 
statistics  to  prove  how  much  the  dependent  and  pauperized 
classes  are  increased  by  intemperance,  vice,  and  crime. 
That  these,  however,  are  the  true  causes  of  nine-tenths  of 
the  poverty,  misery,  and  degradation  is  evident  to  any 
candid  observer.  It  is  idle  and  fallacious  to  attribute  evils 
due  to  these  causes  to  any  inherent  fault  of  our  social 
system. 


SOCIALISM  AS  A  POLITICAL   SYSTEM.         I 


*'■  Knowledge  is  the  only  fountain  both  of  the  love  and  the  princi- 
ples of  human  liberty.'''' 


Webster. 


*'  Where  law  ends,  tyranny  begins." 

Wm.  Pitt. 


*'  Of  ichat  avail  the  plough  and  sail, 
Or  land  or  life,  if  freedom  fail? ''"' 

Emerson. 

^''  O  Liberty  !  Liberty!  how  many  crimes  are  committed  in  thy 

name!'''' 

Madame  Roland. 

^'^  Man  is  not  the  creature  of  circumstances.     Circumstances  are 

the  creatures  of  men.'''' 

Disraeli. 

"  Sail  on,  0  Ship  of  State  ! 
Sail  on,  O  Union,  strong  and  great ! 
Humanity  with  all  its  fears. 
With  all  the  hopes  of  future  years, 
Is  hanging  breathless  on  thy  fate  !  " 

The  Building  of  the  Ship. 


XIII. 

SOCIALISM  AS  A  POLITICAL   SYSTEM. 

There  are  few  terms  in  common  use  so  elastic  in  defini- 
tion, and  which  signify  so  many  different  things  to  different 
minds,  as  socialism.  In  its  root  meaning  and  derivation,  it 
is  both  harmless  and  attractive.  To  be  social  is  creditable. 
It  carries  the  idea  of  friendliness,  companionship,  brother- 
hood, neighborly  interest,  and  even  unselfishness.  These 
are  some  of  the  ideal  qualities  of  humanity,  and  it  is  impos- 
sible to  over-estimate  their  importance  and  beauty.  If 
socialism  promised  their  general  embodiment,  it  would  be 
supremely  desirable  and  could  not  come  too  soon.  There 
are  some  philanthropists  who  call  themselves  ''  socialistic," 
and  persuade  themselves  that,  in  some  way,  the  government 
can  take  hold  of  the  matter  and  speedily  usher  in  the  reign 
of  these  delightful  conditions.  There  are  sentimental  cler- 
gymen, who  look  upon  business  from  the  outside,  and  know 
little  of  its  inherent  self-regulative  and  compensatory  laws, 
who  wish  to  see  a  New  Order,  from  the  fact  that  they  are 
unable  to  discriminate  between  the  present  natural  system 
and  its  abuses.  They  forget  that  everything  normal  has  its 
negatives  and  violations.  There  are  "  Christian  Socialists  " 
who  are  unmindful  that  He  whom  they  regard  as  their  per- 
fect and  complete  ]Model  labored  entirely  within  the  domain 
of  human  life  and  character,  and  not  at  all  in  external 
political  affairs,  which,  in  their  very  nature,  are  only  expres- 
sive and  resultant. 

Some  enthusiastic  theorists  hail  every  little  widening  of 
state  or  municipal  functions  —  made  necessary  by  advan- 

145 


14G         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

eing  civilization  —  as  "  socialistic,"  and  harbor  the  pleasant 
illusion  that  society  is  shortly  to  be  reconstructed  by  a 
short-cut  process.  But  the  beautiful  social  qualities  before 
enumerated  are  not  political,  but  moral  and  personal.  Their 
location  is  in  the  individual,  and  their  exercise  comes 
through  voluntary  growth  and  unfoldment. 

Yielding  to  no  one  in  our  admiration  for  socialistic  qual- 
ities in  moral  character,  socialism  is  here  considered  as  a 
political  system.  This  is  its  claim,  and  there  is  no  other 
logical  method.  The  accepted  definition  of  the  term  in- 
volves the  fundamental  political  reconstruction  of  society. 
Any  such  radical  change  must  necessarily  be  coercive  and 
not  evolutionary.  Socialism,  as  a  system,  means  not 
merely  a  friendly  interest  in  our  neighbor's  welfare,  but  a 
formal  and  forcible  one.  Instead  of  natural  liberty,  it  sig- 
nifies artificial  interference,  even  though  imposed  in  the 
name  of  brotherhood.  It  would  ignore  inherent,  elastic, 
self-regulative  forces,  which  are  omnipresent,  and  prescribe 
everything  by  mechanical  metes  and  bounds.  Ignoring 
spontaneous  individual  growth,  it  would  furnish  universal 
moulds  casting  all  shapes  in  stiff  and  arbitrary  form. 

Socialism,  as  a  possible  political  framework,  is  not  only 
fatal  to  all  evolutionary  social  development,  but  is  para- 
lyzing to  all  ideal  human  brotherhood.  If  it  were  possible 
to  make  men  altruistic  by  legislation,  all  its  sweetness 
would  vanish  with  the  loss  of  its  voluntary  and  spontaneous 
spirit.  But  legislation  piled  Ossa  on  Pelion  will  not  change 
human  character.  As  well  galvanize  a  decaying  body  into 
youthful  vigor  as  to  inspire  brotherly  love,  or  even  morality, 
by  coercive  legalism.  As  properly  call  a  stick  of  timber  a 
tree,  as  to  denominate  political  socialism  brotherhood.  A 
"  whited  sepulchre  "  is  a  sepulchre  still.  Were  it  possible 
to  put  in  motion  an  entire  paraphernalia  of  outward  bal- 
ances, checks,  weights,  and  measures,  living  benevolence 
and  unselfish  service  would  become  extinct. 


SOCIALISM  AS   A  POLITICAL  SYSTEM.  147 

A  non-recognition  of  the  self-regulative  and  educational 
forces  of  Natural  Law,  everywhere  present,  leads  many  to 
conclude  that  there  is  but  one  way  to  get  rid  of  injustice, 
and  that  is  to  pass  legal  enactments  against  it.  It  is  like 
building  a  dam  across  a  stream.  As  the  water  behind  it 
rises  they  would  build  it  higher,  and  patch  it  here  and  brace 
it  there.  But  if  it  be  not  swept  away,  the  current,  in  full 
volume,  soon  flows  over  it.  Mistaking  abnormities,  which 
come  from  human  distortion,  for  normality,  they  would 
raise  an  artificial  wall  to  forever  stop  the  rising  flood  of 
evils. 

Legislation  is  invoked  to  cure  all  the  ills  "  that  flesh  is 
heir  to."  Is  there  injustice  ?  let  us  make  a  law  against  it. 
Are  hours  too  long  ?  shorten  them  by  law.  Is  there  too 
much  competition  ?  put  it  down  by  law.  Are  there  trusts  ? 
wipe  them  out  by  law.  Are  times  hard  ?  improve  them  by 
law.  Is  money  tight  ?  make  more  by  law.  Is  the  millen- 
nium slow  in  coming  ?  invoke  the  law.  An  able  writer,  in 
a  recent  article,  characterizes  the  proposed  phenomenal 
legislation  as  the  modern  tower  of  Babel.     He  says :  — 

"  And  now  there  comes  a  band  of  earnest  men  and  women  who 
see  plainly  the  evils  of  the  times,  and  who  would  give  up  much  to 
help  their  fellow-men.  '  Come  brothers,'  they  say,  '  let  us  be  brothers 
indeed.  We  will  make  a  tremendous,  a  sky-reaching,  an  all-power- 
ful law,  that  all  men  are  and  shall  be  brothers ;  that  no  one  shall 
have  more  of  this  world's  goods  than  another;  that  each  shall  give 
his  best  work  and  his  best  endeavors  for  the  common  good  of  all. 
We  will  all  work  for  the  Government,  and  the  Government  will  feed 
us  all.  We  will  have  no  more  poverty  and  no  more  riches,  but  all 
shall  work  and  eat  at  the  nation's  table,  and  none  shall  be  kept  back 
in  idleness  or  go  away  in  hunger.'  This  is  the  plan  of  the  Nation- 
alist. It  is  the  loftiest  structure  of  its  kind  that  the  mind  of  man 
ever  sought  to  rear;  for  socialism  thinks  to  outwit  Mother  Nature 
herself,  and  to  legislate  the  law  of  the  survival  of  the  fittest  off  the 
face  of  the  earth.  It  is  the  modern  tower  of  Babel.  But  it  is  not  to 
be  built  of  bricks,  but  of  men;  and  the  mortar  of  legislation  never 


148        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

can  make  a  man  stay  put.  The  law  of  evolution  is  superior  to  the 
laws  of  men.  Before  man  was,  it  was,  and  yet,  like  the  Babel 
builders  of  old,  he  thinks  to  overtop  it." 

As  a  moving  body  seeks  the  line  of  least  resistance,  the 
average  man  will  make  a  living  with  as  little  exertion  as 
possible.  Nine  times  out  of  ten,  as  has  often  been  demon- 
strated, if  he  were  in  the  man's  shoes  whom  he  regards  as 
an  "  oppressor,"  he  would  be  the  harder  man  of  the  two. 
What  every  live  man  needs  is  not  more  law  but  less.  He 
wants  natural  freedom,  consistent  with  the  freedom  of 
others,  and  has  no  use  for  arbitrary  trammels. 

The  two  wings  of  the  socialistic  propaganda  are  very 
unlike.  At  one  extreme  is  a  small  band  of  earnest  souls, 
sincere  and  benevolent,  though  impractical.  They  are 
filled  with  a  fraternal  spirit  themselves  and  wish  every  one 
else  to  be.  But  under  the  same  banner,  though  ten  times 
as  mmierous,  are  those  to  whom  socialism  means,  not  more 
fraternity,  but  a  grand  divide.  Avarice  and  envy  are  covert 
elements  in  human  character  which  sway  men  powerfully, 
even  though  often  unconsciously.  The  vast  majority  of 
socialists  whose  ranks  shade  through  different  degrees  into 
red  anarchism,  gather  encouragement  and  strength  from  the 
little  section  of  sentimentalists  who  comprise  the  wing  that 
is  in  sight  and  does  the  theorizing.  The  crowded  social- 
istic columns  that  loom  up  in  the  dark  background  are  look- 
ing forward  to  the  time,  when,  through  the  forms  of  law, 
the  estates  of  the  more  thrifty  may  be  confiscated,  which 
they  imagine  will  give  them  governmental  support  and  an 
easy  time. 

It  is  idle  to  claim  that  the  ignorant  and  unassimilated 
alien  elements  which  form  the  great  bulk  of  the  socialistic 
party  of  America  are  actuated  by  a  fraternal  or  unselfish 
spirit.  Their  lurid  declamations  against  property  and  cap- 
ital, and  the  spirit,  even  of  their  best  literature,  are  conclu- 
sive on  this  point.     Their  prevailing  animus  is  distinctly 


SOCIALISM   AS   A  POLITICAL  SYSTEM.  149 

destructive  and  not  constructive.  When  the  French  Eevo- 
lution  was  kindled,  the  theory  was  "  Liberty,  Equality,  and 
Fraternity."  In  practice,  it  turned  out  to  be,  tyranny, 
cruelty,  and  destruction. 

Were  it  possible  to  inaugurate  political  socialism  even 
without  violence,  it  would  smother  personal  ambition  and 
liberty,  and  discourage  progress.  As  is  now  the  case  with 
penitentiary  labor,  the  minimum  would  speedily  become 
the  maximum.  As  a  practical  result,  consumption  would 
soon  overtake  and  pass  production,  including  the  reserves 
of  previous  accumulation.  Then  would  follow  famine,  civil 
war,  and  anarchy,  and  the  whole  artificial  conglomeration 
would  fall  to  pieces  from  its  own  confusion  and  corruption. 
Brute  force  and  chaos  would  prevail,  until,  at  last,  the  few 
survivors  would  have  again  to  make  a  new  beginning  on 
natural  principles.  But  complacent  theorists  say,  "we 
shall  accomplish  it  through  evolution  without  revolution." 
But  if  it  is  a  good  and  desirable  condition,  the  sooner  it 
comes  the  better,  and  such  is  the  reasoning  of  their  impa- 
tient followers.  In  this  way  gigantic  but  irresponsible 
forces  are  directly  stimulated. 

Socialistic  agitators  descant  upon  "wage-slavery,"  but 
that  is  nothing  compared  with  a  coercion  which  would 
sweep  away  all  liberty.  The  employer  —  and  the  vast  ma- 
jority of  employers  are  not  rich  —  is  a  "  slave "  to  the 
markets,  as  much  as  the  wage-earner  is  to  his  toil,  and  often 
more,  for  he  cannot  so  easily  change  his  position.  It  would 
indeed  be  slavery  to  have  eating,  sleeping,  clothing,  work- 
ing, and  all  the  social  and  personal  activities  conducted 
upon  the  compulsory  plan,  in  which  each  is  assigned  his 
place  by  the  "  majority,"  which  would  really  consist  of  a 
few  official  dictators.  The  blotting  out  of  individual  liberty 
would  mean  real  slavery.  There  would  be  no  incentive  for 
personal  effort,  such  as  is  now  afforded  by  the  hope  of  pro- 
viding for  infirmity  or  old  age,  or  for  the  wants  of  family 


150         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

and  kindred.  The  fruits  of  a  man's  industry  would  belong  to 
"  The  State."  The  choice  of  occupation  would  be  dictated 
by  the  office-holders  of  the  dominant  party. 

The  mild  socialistic  theorist  is  like  a  man  who  is  unwit- 
tingly playing  with  fire  in  the  midst  of  a  wilderness  of 
inflammable  material.  While  he  is  innocently  dreaming 
of  coming  fraternity  he  is  unconsciously  though  forcibly 
appealing  to  some  of  the  strongest  and  lowest  passions  in 
mankind.  These  propensities  are  wholly  on  the  material  or 
animal  plane.  Political  and  coercire  socialism  is  thoroughly 
materialistic.  It  minimizes  character  and  manhood,  and 
magnifies  the  value  of  externals.  When  the  theoretical 
socialist  indulges  in  exaggeration  about  the  unequal  distri- 
bution of  wealth,  as  attributable  to  the  present  order,  he 
directly  appeals  to  the  envy  and  avarice  of  the  ignorant 
and  selfish.  They  are  made  to  believe  that  the  reason  why 
they  have  not  as  much  wealth  as  some  one  else  is  because 
they  have  not  had  their  rights.  Socialism  is  no  question  of 
the  poor  against  the  rich.  It  would  be  as  disastrous  to  the 
former  as  to  the  latter.  It  is  a  question  of  thrift,  industry, 
economy,  and  character,  against  dependence,  shiftlessness, 
and  avarice.  It  would  prostrate  individuality  instead  of 
placing  it  upon  its  feet. 

There  are  marked  inequalities  among  men  and  else- 
where, and  there  will  be  until  the  law  of  evolution  is 
repealed  and  the  universe  reconstructed.  But  the  divine 
order  provides  that  those  who  are  most  advanced  shall  be 
an  aid  and  inspiration  to  those  who  are  in  the  rear.  The 
spirit  of  a  voluntary  and  altruistic  brotherhood  was  never 
before  so  active,  and  nothing  but  a  cold  and  selfish  legalism 
can  chill  it.  The  overflow  of  charities,  aids,  and  helps  is 
rising  in  volume.  Men  are  recognizing  a  racial  unity,  even 
though  it  be  made  up  of  diversity.  Voluntary  \drtue  grows 
and  glows  in  profusion  and  purity,  but  a  coercive  element 
introduces  formal  legalism  and  coldness.   There  always  have 


SOCIALISM  AS   A  POLITICAL   SYSTEM.  151 

been,  and  will  be,  leaders  and  followers  in  knowledge,  power, 
wealth,  invention,  science,  and  philosophy,  and  the  world 
would  be  in  a  sad  condition  if  all  were  levelled  down  to  a 
dead  common-place.  The  "  fittest "  portray  the  possibilities 
and  inspire  the  ambition  of  the  less  fit.  Such  is  the  law  of 
growth  which  always  progresses  from  within.  The  hostil- 
ity that  is  being  worked  up  against  honorable  accumulation, 
upon  the  theory  that  "  property  is  robbery,"  is  an  outcrop- 
ping of  barbarism  and  an  invitation  to  return  to  it.  The 
proposed  legislation  of  some  of  the  trans-Mississippi  States 
would  lead  one  to  suppose  that  capital  is  not  only  not  to  be 
invited,  but  something  to  be  kept  out. 

The  present  labor-value  product  of  a  manual  workman, 
as  measured  in  comfort  and  luxuries,  is  about  three  times 
what  it  was  forty  years  ago.  The  advance  has  been  natural 
and  healthful,  and  will  be  continuous  under  normal  condi- 
tions. This  represents  the  advance  of  a  class,  but  in  Amer- 
ica individuals  are  not  bound  to  a  class.  Those  who  are  self- 
fitted  leave  it  behind.  It  is  preposterous  to  make  "the 
social  system  "  the  pack-horse  for  the  huge  load  of  nega- 
tions, sins,  and  weaknesses  that  inhere  in  ignorance  and 
imbecility. 

Through  the  rosy  vision  of  the  theorist,  "  The  State  "  — 
which  is  the  all-comprehensive  agency  in  socialism  —  will 
be  a  perfect,  omnipresent,  and  omnipotent  instrumentality, 
able  not  only  to  cognize  every  detail,  but  to  control  univer- 
sal equity  and  righteousness.  But  the  real  State  would  be 
composed  of  office-holding  politicians.  With  tenfold  greater 
opportunities  than  present  conditions  afford,  the  probable 
reign  of  dictation,  jobbery,  and  favoritism  may  be  faintly 
imagined. 

It  is  foreign  to  our  purpose  to  attempt  any  historical  or 
detailed  study  of  voluntary  local  socialistic  experiments 
which  have  been  made.  Though  differing  somewhat  in 
doctrine,  they  have  positive  features  in  common,  which 
are  visionary  and  abnormal. 


152        THE  POLITICAL  ECONOMY  OP  HUMANISM. 

At  one  period  iu  his  career,  Horace  Greeley  gave  local 
voluntary  communism  an  earnest  investigation.  His  opin? 
ion  was  formed  after  close  and  practical  observation.  He 
says : — 

"  Along  with  many  noble  and  lofty  souls,  whose  impulses  are 
piu-ely  philanthropic,  and  who  are  willing  to  labor  and  suffer  reproach 
for  any  cause  that  promises  to  benefit  mankind,  there  throng  scores 
of  whom  the  world  is  quite  worthy,  —  the  conceited,  the  crochety, 
the  selfish,  the  headstrong,  the  pugnacious,  the  unappreciated,  the 
played-out,  the  idle,  and  the  good-for-nothing  generally;  who,  find- 
ing themselves  utterly  out  of  place  and  at  a  discoimt  in  the  world 
as  it  is,  rashly  conclude  that  they  are  exactly  fitted  for  the  world  as 
it  ought  to  be." 

Socialism  is  not  indigenous  to  American  soil,  and  is  an 
exotic  in  any  country  where  free  and  constitutional  govern- 
ment prevails,  though  it  assumes  to  oppose  despotism.  As 
by  Natural  Law  extremes  meet,  so  violent  or  compulsory 
socialism  becomes  itself  despotism.  Its  apostles  and  advo- 
cates are  not  numerous  among  native  American  citizens,  or 
even  among  those  of  foreign  birth  who  have  any  intelligent 
appreciation  of  our  political  system.  These  irreconcilable 
extremists  are  willing  to  ingulf  society,  themselves  included, 
in  general  ruin,  and  to  relapse  into  consequent  barbarism, 
rather  than  that  existing  civilization  and  government  should 
continue.  That  they  gather  moral  encouragement  from 
milder  socialists,  some  of  whom  advocate  the  same  end, 
but  hope  to  bring  it  about  by  peaceful  means,  is  beyond  a 
doubt.  The  pronounced  sentimentalism  of  the  times,  which 
is  making  such  efforts  to  set  aside  natural  principles,  is, 
though  perhaps  unwittinglj'-,  lending  encouragement  in  the 
same  direction.  The  warfare  against  Natural  Law  is  car- 
ried on  by  an  army  of  allies  whose  several  motives  and  aims 
greatly  vary,  but  in  this  general  hostility  they  are  a  unit. 

Experience,  as  before  noted,  which  is  the  indorser  of 


socialis:m  as  a  political  system.  153 

law,  shows  the  uniform  failure  of  socialism  even  in  small 
select  communities  under  conditions  highly  favorable  to 
success.  Voluntary  socialism,  under  the  most  flattering  cir- 
cumstances, and  with  the  most  conscientious  and  enthusi- 
astic leaders,  has  been  experimented  with  again  and  again. 
It  is  true  that  in  certain  instances,  societies  having  social- 
istic features  have  existed  for  a  while,  but  in  none  has 
there  been  vitality  and  growth.  From  "  Brook  Farm  "  down 
to  the  present  time,  there  have  been  occasional  bands  of 
impracticables  who  have  repeated  the  experiment.  Of 
course  such  little  local  voluntary  communities  are  per- 
fectly harmless  and  have  no  likeness  to  a  general  political 
system.  They,  however,  furnish  a  test  of  the  principles 
under  a  thousand-fold  greater  chances  for  success  than 
would  be  possible  for  the  proposed  New  Order.  If  such 
mild  and  promising  examples  have  proved  futile,  what 
might  be  expected  as  the  result  of  a  violent  and  compulsory 
commune,  attempted,  not  with  a  voluntary  and  picked  com- 
munity, but  with  all  the  heterogeneoiis  elements  of  society  ? 
A  menagerie  let  loose  would  be  a  fit  illustration  of  the 
result.  If  attempted,  it  would  very  likely  produce  an  up- 
heaval similar  to  the  French  Revolution.  World-wide 
experience,  as  well  as  the  teachings  of  Natural  Law,  prove 
the  truth  of  the  proposition,  —  that  the  condition  of  civili- 
zation or  barbarism  among  nations  is  in  proportion  to  the 
security  and  inviolability  of  individual  property  rights. 
Adam  Smith  asserted  that  the  security  aiforded  to  property 
by  the  laws  of  England  had  more  than  counterbalanced  the 
repeated  faults  and  blunders  of  the  government.  It  is  not 
too  much  to  claim  that  the  foremost  and  commanding  posi- 
tion of  England  and  the  United  States  of  America  among 
the  nations,  is  due  to  the  safeguards  erected  around  prop- 
erty rights,  and  the  but  slightly  obstructed  operation  of 
natural  laws  by  governmental  or  other  interference.  No 
nation  can  be  named  where  private  accumulations  are  inse- 


154        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

cure,  in  which  there  is  not  a  coexisting  state  of  barbarism. 
These  truths  are  so  obvious  that  it  seems  superfluous  to 
demonstrate  them.  But  the  fact  remains  that  charlatans  in 
political  economy  are  making  great  efforts  to  disseminate 
opposite  theories,  and  apparently  with  much  success. 

It  is  the  main  province  of  legislation  and  political 
science  to  provide  the  best  and  surest  means  for  protecting 
industry.  This  is  all-important,  for  the  reason  that  the 
right  of  personal  accumulation  is  the  most  powerful  of  all 
encouragements  to  energy,  thrift,  and  the  increase  of 
wealth.  The  certainty  that  a  raan  can  enjoy  the  fruits 
of  his  toil  is  the  great  stimulus  to  productio7i,  enterprise, 
and  prosperity,  with  the  individual  and  with  the  nation. 
In  those  parts  of  the  world  where  the  title  to  property 
depends  upon  a  strong  arm,  or  where  it  is  liable  to 
confiscation  by  the  ruling  power,  production  is  confined  to 
its  rudest  and  most  primitive  forms.  The  doctrine  of  gen- 
eral or  governmental  ownership  of  land  —  which  some 
visionary  but  well-meaning  people  think  would  "abolish 
poverty "  —  is  already  in  force  in  large  sections  of  Asia 
and  Africa ;  and  as  a  natural  result,  there  is  no  fixed  prop- 
erty except  of  the  rudest  description,  and  valuables  are 
either  hid  in  the  earth,  or  quickly  carried  by  caravans  to 
places  where  private  ownership  is  recognized  and  protected. 

With  human  nature  as  it  is,  how  many  would  be  provi- 
dent, industrious,  or  economical  under  the  most  perfect 
system  of  socialism  yet  conceived  ?  Enterprise,  ambition, 
invention,  and  progress  would  all  wither,  as  if  under  the 
shade  of  the  deadly  upas.  If  an  ideal  millennium  had 
come  upon  the  earth,  so  that  men  loved  others  more  than 
themselves,  there  would  be  true  moral  socialism  from 
within ;  but  until  such  a  time,  civil  law  and  government 
will  be  indispensable. 

The  genius  of  socialism  seems  to  be  embodied  in  the 
old  adage  that  "  the  world  owes  every  man  a  living."     No 


SOCIALISM  AS  A  POLITICAL  SYSTEM.  155 

matter  how  lazy,  improvident,  or  reckless  he  may  be,  his 
industrious  neighbor,  who  by  patient  toil  has  become  the 
owner  of  accumulated  labor,  is  expected  to  divide  with  him, 
and,  in  future,  to  keep  on  dividing. 

Socialistic  agitators  ring  so  many  changes  on  such  re- 
cently coined  phrases  as  "  impending  revolution,"  "  wage- 
system  slavery,"  'industrial  crisis,"  etc.,  indicating  some 
expected  revolution,  that  some  persons  actually  look  for  a 
time  not  far  distant  when  the  government,  through  whole- 
sale confiscation,  will  be  able  to  take  care  of  them,  and 
work  be  a  thing  of  the  past.  Is  it  a  wonder  that  great 
masses  of  ignorant  immigrants  become  saturated  with  such 
ideas,  when  it  is  considered  that  socialistic,  atheistic,  and 
anarchic  literature  forms  their  chief  intellectual  diet  ? 
Many  of  them  remain  in  solid,  unassimilated  masses,  and 
learn  little  or  nothing  of  our  institutions  or  language.  Here 
is  a  fertile  field  in  which  to  sow  the  seed  of  moral  and 
economic  truth.  The  right  sort  of  reading  matter  in  their 
own  tongues  would  do  much  to  neutralize  the  baneful  in- 
fluences which  loom  up  on  our  national  horizon  like  a  black 
cloud. 


CAN   CAPITAL   AND   LABOR  BE 
HARMONIZED  ? 


"  One  touch  of  nature  makes  the  whole  world  kin.^^ 

TKOILUS  and   CRE86IDA. 

"  J?e  had  a  face  like  a  benediction.'" 

Don  Quixote. 

"  Not  chaos-like  together  crushed  and  bruis'd, 
But,  as  the  world,  harmoniously  confus'd, 
Where  order  in  variety  we  see, 
And  where,  though  all  things  differ,  all  agree.''^ 

Pope. 

^^  If  thou  shouldst  lay  up  even  a  little  upon  a  little,  and  shouldst 
do  this  often,  soon  would  even  this  become  great. 

Hesiod. 


"  Gain  not  base  gains  ;  base  gains  are  the  same  as  bosses." 

Ibid. 


•  Brother,  Brother  !  we  are  both  in  the  wrong.'''' 

Gay. 


XIV. 
CAN   CAPITAL  AND  LABOR    BE    HARMONIZED? 

Capital  and  labor,  being  natural  interdependent  condi- 
tions, are  already  harmonious.  It  is  only  personalities  that 
are  discordant.  The  conventional  arbitrary  division  of 
society  into  two  parts,  respectively  termed  capital  and 
labor,  is  prejudicial  and  misleading.  Labor  is  like  a  tree 
of  which  capital  is  the  fruit.  The  sentimental  antagonism 
between  the  two  which  has  sprung  up  in  many  minds  — 
and  it  has  no  other  existence  —  is  unfortunate  for  both. 
Capitalists  and  laborers  are  relatively  good  or  otherwise, 
but  capital  and  labor  are  only  good.  How  can  two  parts 
of  a  unit,  each  utterly  incomplete  without  the  other,  be 
naturally  antagonistic  ? 

Human  activity  systematically  applied,  is  labor;  and 
the  outcome,  whether  large  or  small,  is  product,  or  capital. 
Capital  is  only  a  name  for  preserved  or  stored-up  labor.  A 
stock  of  bows  and  arrows,  baskets,  or  skins  is  the  capital  of 
an  Indian,  and  the  preserved  harvest  that  of  a  farmer. 
Capital  may  be  visible  or  invisible,  material  or  mental. 
The  wage-worker,  and  no  less  the  school-teacher,  and  even 
the  pupil,  are  all  laboring  to  produce  it. 

A  baseless  and  wide-spread  fallacy  exists,  to  the  effect, 
that,  in  some  way,  there  is  a  limited  and  fixed  amount  of 
capital  in  the  aggregate,  so  that  if  some  have  more,  others 
must  have  less  on  that  account.  On  the  contrary,  capital  is 
like  seed ;  it  tends  to  propagate  itself,  though  not  necessa- 
rily by  making  its  original  owner  poorer.  There  is  a  con- 
stant creation  of  capital,  and  the  larger  the  amount  already 

159 


160         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

in  existence,  the  more  easily  and  rapidly  additions  are 
made.  There  is  a  popular  feeling  that  the  very  wealthy 
are  "monopolists,"  and  even  their  inanimate  possessions 
almost  seem  to  come  in  for  a  share  of  opprobrium.  But 
however  unwise,  or  even  selfish,  persons  may  be,  product  is 
good.     It  has  both  intrinsic  and  representative  value. 

The  Astor  estates  in  New  York  are  examples  of  great 
accumulation.  But  in  each  and  every  building  belonging 
to  them  labor,  skilled  and  unskilled,  has  been  employed, 
paid  for,  and  stored  up  in  every  detail,  from  foundation  to 
cap-stone.  Their  care  and  repairs  will  also  require  future 
labor  indefinitely.  As  wealth  accumulates,  it  calls  for  higher 
and  finer  grades  of  production.  Primitive  communities 
have  little  use  for  artists,  carvers,  decorators,  sculptors,  and 
frescoers.  This  is  no  apology  for  Avealth,  for  none  is 
required.  It  is  only  a  study  of  the  laws,  demands,  and 
methods  of  an  opulent  civilization.  If  half  a  dozen  wealthy 
proprietors  locate  together,  even  in  a  wilderness,  labor  is 
stimulated  and  growth  takes  place  on  every  side.  Stored-up 
labor  not  only  pays  taxes,  but  constantly  demands  active 
labor.  Even  its  net  income  is  reinvested,  and  goes  to  swell 
the  great  current  of  business  enterprise.  In  those  countries 
or  cities  where  the  economic  accumulations  are  great,  the 
poorest  inhabitant  shares  their  advantages.  The  public 
parks,  libraries,  and  art  museums  which  are  accessible  to 
every  one  in  all  large  cities,  exist  only  as  the  fruit  of  great 
and  concentrated  wealth.  A  public  garden  or  flower-lined 
boulevard,  made  possible  only  by  a  vast  surplus  of  stored-up 
labor,  exhales  its  beauty  and  fragrance  to  the  penniless 
visitor  as  much  as  though  he  were  its  sole  owner.  The 
modern  municipalit}^  consists  of  a  boundless  amount  of 
human  energy  and  skill  in  preservation.  To  be  consistent 
those  pessimists  who  count  "  property  as  robbery  "  should 
remove  to  a  desert. 

Labor-value  is  fixed  by  the  average  opinion  of  mankind, 


ca:jt  capital  Amy  labor  be  harmonized?    161 

and  depends  upon  the  intelligence  back  of  it  as  displayed 
in  the  quality  of  product.  Any  other  appraisement  must 
necessarily  be  purely  artificial.  The  world  will  freely  pay 
a  hundred  times  as  much  for  a  painting  by  a  Meissonier  as 
for  one  by  an  ordinary  artist,  and  no  theorizing  will  change 
such  a  relative  valuation.  Is  this  fact  a  hardship  to  the 
latter  ?  ISTo ;  because  his  production  is  no  worse  on  accoiuit 
of  the  existence  of  a  Meissonier's,  while,  on  the  other  hand, 
he  is  furnished  with  an  ideal  which  will  more  and  more 
inspire  every  stroke  of  his  brush. 

Capitalists  and  laborers  mingle  in  all  degrees.  Many 
highly  successful  employers  work  more  hours  than  their 
employees ;  and,  as  is  well  known,  care  and  responsibility 
are  often  more  wearing  than  physical  toil. 

Under  normal  conditions,  in  the  absence  of  strikes  and 
obstruction,  the  demand  for  labor  by  advancing  civilization 
will  always  equal  the  supply  at  steadily  increasing  rates. 
This  will  be  no  less  true  if  labor-saving  machines  are  yet 
multiplied,  and  even  if  new  motors  are  discovered  in  addi- 
tion to  those  already  utilized.  Efforts,  however,  to  force 
labor-values  beyond  the  smooth  working  of  Natural  Law 
destroy  confidence  and  react  upon  and  injure  the  very  cause 
they  are  expected  to  aid.  Wliile  wages  have  steadily  in- 
creased, the  value  of  capital,  which  is  measured  by  the  rate 
of  interest,  has  materially  declined. 

Occupation  is  indispensable  to  human  progress  and  har- 
mony. The  drone,  whether  rich  or  poor,  who  lives  in  idle- 
ness or  for  selfish  gratification,  reaps  the  inherent  penalty, 
which  is  decay.  A  large  part  of  the  discontent  among 
manual  laborers  arises  from  the  mistaken  idea  that  happi- 
ness and  contentment  naturally  come  from  wealth.  But 
man  is  so  constituted  that  he  can  absorb  only  a  certain 
limited  amount  of  material  good,  and  every  attempt  to  do 
more  results  in  satiety  and  disappointment.  Most  men 
refuse  to  learn  this  lesson,  except  as  the  bitter  result  of 


162         THE  POLltlCAL  ECOJNOMY  OF  HUMANISM. 

experience,  but  it  is  a  fact  that  tlie  sons  of  rich  men  begin 
active  life  heavily  handicapped.  Human  life  is  barren  and 
disappointing  unless  inspired  by  an  abiding  and  worthy 
piLiyose,  and  no  talent  grows  except  through  faithful  exer- 
cise. Contributions  to  the  world's  wealth  are  as  genuine 
when  made  in  knowledge,  science,  art,  or  research,  as  in 
food  or  clothing. 

The  claim  is  made  on  the  part  of  labor  that  it  does  not 
receive  a  fair  share  of  the  profits  of  production.  What 
constitutes  a  just  division  of  these  products  ?  Exactly 
what  the  so-called  labor  reformers  and  sentimentalists  de- 
mand is  a  matter  of  great  uncertainty.  The  ovlj  unanimity 
among  them  is  in  dissatisfaction.  As  any  proposed  new  di- 
vision must  be  made  by  ever  shifting  artificial  rules,  there 
could  be  no  substantial  agreement.  When  the  solid  ground 
of  natural  principles  is  abandoned,  the  restless  currents  of 
sentimentalism  reveal  no  resting-place. 

It  is  not  strange  that  manual  laborers  often  feel  dissatis- 
fied. As  a  rule,  they  toil  hard  for  a  very  moderate  subsist- 
ence. When  they  look  around  and  see  many  who  have  a 
surplus,  they  think  there  must  be  something  wrong  in  a 
system  under  which  there  is  such  inequality.  But  such  rea- 
soning is  superficial.  Men  are  created  with  unequal  capaci- 
ties and  powers,  and  it  is  beyond  human  ability  to  equalize 
them.  Society  could  as  effectually  resolve  that  two  and 
two  make  five.  The  world's  conclusions  cannot  be  arbi- 
trarily set  aside.  It  values  mental  force  at  a  higher  rate 
than  manual,  and  it  would  be  as  futile  to  attempt  to  change 
these  conclusions  as  to  level  the  Alps.  Society  is  exact 
and  unerring  in  its  estimates.  It  marks  its  valuations  on 
both  mental  and  manual  force  with  as  great  a  degree  of 
accuracy  as  is  seen  in  the  coinage  of  a  mint. 

The  brain  force  of  a  McCormick,  which  conceived  the 
reaping  machine,  was  greater  in  the  results  of  its  produc- 
tion than  a  million  strong  right  arms,  each  of  which  could 


CAN  CAPITAL  AND  LABOR   BE   HARMONIZED?      163 

wield  the  sickle.  The  world,  therefore,  makes  its  appraise- 
ment of  his  product  at  millions  of  dollars,  and  willingly 
pays  the  obligation.  Whether  or  not  we  like  it,  this  law 
cannot  be  repealed.  The  brain  power,  not  only  of  in- 
ventors, but  of  all  those  who  possess  the  ability  to  organize 
and  execute,  is  scarce,  sought  for,  and  therefore  has  a  high 
valuation.  The  mental  force  that  organizes,  builds,  and 
puts  into  operation  a  great  railway  system  is  worth,  per- 
haps, millions,^  because  its  product  may  be  the  settlement 
and  development  of  two  or  three  States  or  Territories.  If 
this  kind  of  force  were  more  plentiful,  the  world  would  not 
put  such  an  extravagant  valuation  upon  it.  A  thousand 
muscular  bodies  may  be  found  as  often  as  a  single  brain  of 
this  quality.  No  amount  of  sentiment  can  change  the 
arrangement  of  these  evolutionary  principles.  Were  it  in 
our  power  to  explore  deeply  enough,  we  should  probably 
find  that  it  is  even  best  as  it  is.  It  is  only  the  few  who  are 
skilful  in  originating  enterprises,  and  in  conducting  them 
to  a  successful  termination.  They  also  have  a  better  knowl- 
edge of  Natural  Law,  which  they  make  the  most  of  by 
securing  its  aid.  If  the  many  could  command  all  these 
advantages  of  mental  power,  there  would  be  a  much  wider 
table-land  of  equality.  It  is  now  only  the  lofty  peaks  of 
attainment  and  production  that  attract  special  attention. 
Having  found  that  inequality  is  universal  and  based  on  law, 
it  is  unwise  to  complain  of  it,  and  foolish  to  expect  to 
abolish  it.  Did  the  Creator  make  a  mistake  when  he  in- 
stituted the  evolutionary  order  which  makes  men  of  unequal 
capacity  ?  As  it  is,  every  man  gets  the  reward  which 
comes  from  the  exercise  of  his   own   productive   energy. 

1  We  do  not  forget  that  there  are  men  of  this  class  who  liave  amassed 
large  fortunes  by  stock  manipulations  ■which  are  illegitimate.  Such  an 
exercise  of  mental  energy  is  unnatural,  perverted,  and  hostile  to  the  best 
interests  of  society.  Natural  Law  would  sanction  restrictive  legislation 
■when  applied  to  such  artificial  operations,  and  also  the  positive  and  sure 
punishment  of  every  form  of  dishonesty. 


164         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

This  fact  furnishes  a  continual  stimulus  to  the  lower  to 
advance  towards  the  higher.  Were  it  not  for  brain  labor, 
we  should  still  be  in  barbarism.  It  is  the  increased 
production  of  the  mental  force  of  the  few  that  has 
developed  civilization.  Labor,  which  is  now  making  com- 
plaint, is  getting  a  large  share  of  the  benefits  of  this 
improvement,  its  blessings  being  enjoyed  even  by  the 
humblest. 

Capital  is  only  the  surplus  that  is  saved  above  consump- 
tion, and  it  is  not  only  the  progenitor  of  civilization,  but  it 
is  all  that  gives  value  to  labor.  Without  it  there  would  be 
no  demand  for  labor.  So  far,  then,  from  being  envious  of 
another's  greater  attainment,  we  should  rejoice  over  it;  for 
we  are  better  off  than  we  should  be  otlierwise.  The  cap- 
italist who,  with  executive  talent  and  millions  of  money, 
has  built  a  railroad,  has  done  a  great  favor  to  labor  and 
society.  Boundless  acres,  before  useless,  are  by  its  influ- 
ence transformed  into  fruitful  farms.  Thousands  of  labor- 
ers, in  addition  to  those  who  receive  direct  employment 
from  its  operation,  thus  find  sustenance  and  occupation.  It 
is  a  fallacy  that  the  presence  of  the  very  rich  in  society 
tends  to  make  the  masses  poorer.  It  is  exactly  the  oppo- 
site. The  sentimental  and  false  ideas  now  prevailing  on 
this  subject  are  the  fruits  of  demagogism  and  envy.  There 
is  a  kind  of  discontent  which  is  wholesome,  for  it  stimulates 
effort ;  but  the  variety  now  prevailing  seems  to  be  of  the 
envious  kind,  for  its  spirit  is  to  pull  down  rather  than  build 
up.  If  these  conclusions  are  correct,  it  follows  that  im- 
provement for  wage-earners  must  be  looked  for  in  harmony 
v/ith  them.  We  shall  succeed  if  we  call  to  our  aid  the 
powerful  machinery  of  natural  principles,  but  fail  if  we 
challenge  and  defy  them.  There  is  no  panacea  nor  charm 
by  which  poverty  may  be  abolished,  and  no  magical  cure 
for  the  ills  of  society  and  inequalities  of  fortune.  There 
iS;  however,  room  for  vast  improvement,  if  sought  in  the 


CAN   CAPITAL   AND   LABOR  BE   HAEMONIZED?      165 

right  direction.  We  must  work  along  the  lines  of  Natural 
Law,  instead  of  trying  to  cross  them  at  right  angles. 

Before  indicating  more  fully  how  the  relations  between 
capital  and  labor  may  be  harmonized,  let  us  note  briefly 
some  things  which  cannot  accomplish  it. 

It  cannot  be  done  by  combinations  of  like  elements,  as 
of  laborers  with  laborers  and  employers  with  employers. 
Natural  competition  always  exists  between  occupations 
which  are  alike.  If,  therefore,  a  number  of  carpenters  or- 
ganize an  artificial  combination  which  holds  them  together, 
it  is  in  direct  opposition  to  the  law  of  natural  competition. 
It  is  a  combination  all  on  one  side,  and  is  as  incomplete  as 
a  four-wheeled  carriage  would  be  with  two  of  its  wheels  re- 
moved. These  carpenters  are  helpless  because  there  is  no 
demand  but  only  supply  in  their  combination.  Improve- 
ment will  not  come  by  means  of  paternal  forms  of  govern- 
ment, for  the  reason  that  the  socialistic  principle  is  fatal  to 
individual  enterprise,  and  antagonistic  to  all  the  influences 
which  can  inspire  the  many  to  work  their  way  higher. 
Neither  can  it  be  brought  about  by  the  promulgation  of 
sentimental  doctrines  which  teach  the  laborer  that  he  is  a 
poor,  weak  member  of  society,  who  needs  guardianship. 
Everything  of  this  kind  increases  dependence  and  dis- 
courages personal  excellence  and  ambition. 

Rather  should  we  look  for  improvement  wherever  the 
interests  of  the  two  elements  can  be  blended  and  unified, 
and  production  be  increased,  by  subduing  prejudice  and 
cultivating  harmony.  Promulgate  the  fact  that  the  inter- 
est of  one  is  the  interest  of  both. 

Co-operation  has  been  suggested  as  a  solution  of  labor 
troubles.  This  has  merit  but  has  not  been  uniformly  suc- 
cessful. The  requisite  brain  force  to  organize  and  conduct 
business  enterprises  successfully  has  often  been  wanting 
among  Avorking  co-operators.  But  if  they  can  secure  a 
management  which  combines  executive  ability  and  honesty, 


1G6        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

they  may  get  the  advantages  of  proprietorship.     Failing  in 
this,  co-operative  experiments  will  not  succeed. 

A  system  of  profit  sharing,  by  means  of  a  more  or  less 
intimate  industrial  partnership,  already  considered  in  a 
previous  chapter,  is,  however,  more  promising,  and  the  prin- 
ciple is  capable  of  wide  and  general  application  in  one  form 
or  another.  We  believe  that  the  escape  from  present  difii- 
culties  can  only  be  successfully  sought  in  this  direction,  for 
nothing  else  will  weld  the  two  interests  that  are  so  popu- 
larly supposed  to  be  diverse.  The  adoption  of  this  plan 
will  require  capitalists  and  employers  to  take  the  initiative, 
which  they  can  well  afford  to  do  in  view  of  the  prevailing 
discontent  and  antagonistic  feeling  in  the  ranks  of  labor. 
Whether  or  not  there  is  good  foundation  for  this  feeling,  it 
exists,  and  therefore  some  movement  must  be  made,  or  all 
interests  will  suffer.  These  strained  relations  result  in  un- 
willing, imperfect,  and  lessened  production,  causing  a  loss 
to  all  interests.  Their  natural  effect  upon  the  laborer  is 
seen  in  his  rendering  the  least  possible  service  that  is  com- 
patible with  full  wages.  His  heart  is  not  in  his  work. 
Give  him  even  a  small  stimulus  besides  mere  wages,  and 
then  note  if  there  be  not  improvement.  Offer  to  those  who 
are  faithful  and  industrious  a  bonus  at  the  end  of  the  year. 
See  if  a  division  in  this  way  of  five,  ten,  or  fifteen  per  cent 
of  the  profits  will  not  prove  mutually  beneficial.  The  em- 
ployer should  be  frank  and  sympathetic  with  his  employees 
and  thus  gain  and  merit  their  confidence  and  respect.  In 
the  case  of  railroad  employees  and  other  kinds  of  employ- 
ment where  it  is  not  practicable  to  divide  a  percentage  of 
profits,  a  system  of  rewards  for  faithful  and  continuous 
service  promises  good  results.  The  mutual  interest  in  the 
amount  and  quality  of  production  is  the  important  feature, 
and  this  may  be  attained  in  a  variety  of  ways,  of  which  the 
above  are  but  suggestions.  In  this  way,  the  employer  will 
have  interested  friends  in  his  service,  instead  of  suspicious 


CAN   CAPITAL  AND   LABOR   BE  HARMONIZED?      167 

opponents  working  under  a  temporary  truce.  This  would 
give  strength  and  cohesion  to  all  legitimate  business  enter- 
prises. Having  harmony  for  a  basis  they  would  be  pyramidal 
in  stability.  The  liability  of  outside  dictation,  interference, 
or  strikes,  under  such  conditions,  would  not  be  worth  men- 
tioning. We  earnestly  advise  employers  to  try  experiments 
in  this  direction.  It  may  at  first  appear  that  the  plans 
proposed  are  not  strictly  in  accord  with  Natural  Law ;  but 
upon  investigation  we  find  that  the  union  between  seK- 
interest  and  self -exertion  —  not  necessarily  selfish  in  a  low 
sense  —  is  a  principle  inwrought  in  human  nature.  In 
social  economics,  the  laws  of  mind  and  of  finance  must 
be  considered  in  their  connection.  They  overlap  and 
mingle,  and  exercise  a  modifying  influence  each  on  the 
other. 

To  working-men  we  suggest  that  even  if  you  have  not 
the  promise  of  a  special  dividend  or  bonus,  your  true  inter- 
est is  with  your  employer,  and  not  with  outsiders.  Your 
hopes  of  promotion  rest  with  him.  As  a  rule,  it  will  be  for 
his  interest  to  advance  you  as  your  merits  and  services  war- 
rant. A  half-hearted  service  has  an  injurious  moral  effect 
on  yourself.  If  you  really  belong  higher  than  you  now  are, 
an  opportunity,  in  accordance  with  Natural  Law,  will  soon 
be  afforded  to  rise. 

Finally,  as  in  every  other  department,  the  inharmonies 
between  buyers  and  sellers  of  personal  service  can  only  be 
overcome  by  a  more  intelligent  recognition  of  the  laws  and 
principles  underlying  social  economics.  Openness  to  truth 
must  take  the  place  of  hardness  and  prejudice  on  both  sides. 
Employers  must  win  the  respect  —  yes,  and  even  the  affec- 
tion —  of  their  help,  by  fraternal  interest  and  forbearance. 
Pride  on  both  sides  is  the  great  source  of  friction.  By 
immutable  law,  good-will  always  tends  to  awaken  a  respon- 
sive vibration. 

The  ideal  brotherhood  of  humanity,  which  many  vainly 


168         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

hope  to  galvanize  into  existence  by  legislative  or  artificial 
expedients,  can  be  hastened  by  the  cultivation  of  the  higher 
principles  of  the  human  soul.  Whatever  growth  starts 
from  within  is  natural,  and  it  will  finally  penetrate  society 
to  its  outermost  limits. 


WEALTH   AND   ITS   UNEQUAL 
DISTRIBUTION. 


"  Order  is  Heaven' s  first  law  ;  and  this  confessed, 
Some  are,  and  must  be  greater  than  the  rest; 
More  rich,  more  wise  ;  but  who  infers  from  hence. 
That  such  are  happier,  shocks  all  common  sense.'" 

Pope. 

He  heapeth  up  riches,  and  knoweth  not  who  shall  gather  themJ' 

Ps.  xxxix.  6. 

'''•High  stations,  tumults,  but  not  bliss,  create; 
None  think  the  great  unhappy  but  the  great.'''' 

Young. 

"  Man  wants  but  little  here  below. 
Nor  wants  that  little  long.'''' 

Goldsmith. 

"  A  man  he  was  to  all  the  country  dear. 
And  passing  rich  with  forty  pounds  a  year.'' 

Ibid. 


XV. 

WEALTH  AND  ITS   UNEQUAL  DISTRIBUTION. 

The  unprecedented  fortunes  that  characterize  the  open- 
ing of  the  twentieth  century  invite  wide  attention,  and  the 
conclusion  is  reached  that  natural  economic  laws  must  be 
faulty,  otherwise  such  marked  inequality  would  not  exist. 
Our  decided  preference  is  for  a  more  idealistic  condition  of 
society  in  which,  if  there  were  not  uniformity,  there  might, 
at  least,  be  much  less  sharply  defined  extremes. 

While,  however,  with  much  truth,  the  present  is  regarded 
as  an  era  of  great  and  selfish  Mammon  worship,  a  more 
careful  and  comparative  investigation  shows  that  tlie  tide 
of  human  altruism  among  the  possessors  of  great  wealth  is 
rapidly  increasing  in  volume.  Especially  during  the  last 
decade,  the  amount  of  private  wealth  which  has  been  freely 
devoted  to  public  uses,  in  the  shape  of  school,  college,  and 
university  endowments,  libraries,  hospitals,  art  museums, 
scientific  equipment,  manual  training  institutes,  and  college 
settlements,  to  say  nothing  of  ordinary  charities,  has  been 
vast  and  constantly  increasing.  The  time  seems  not  far 
distant  when  the  possessor  of  great  wealth  who  does  not 
recognize  his  moral  obligation  to  society,  and  the  privilege 
of  some  kind  of  ministry,  will  feel  isolated  and  uncom- 
fortable, if  not  really  ashamed  of  himself.  As  the  spirit 
of  voluntary  benevolence  receives  the  grateful  recognition 
of  society,  a  laudable  emulation  will  doubtless  increase  it 
yet  more  rapidly  in  future.  But  to  grow  it  must  be  volun- 
tary and  spontaneous.  Warmth,  moisture,  and  a  hospitable 
soil,   will   turn   an   acorn   into   an   oak ;    but    the   growth 

171 


172        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

is  from  within,  and  any  forcing  from  without  would  be 
fatal. 

Any  general  movement  towards  a  coercive  socialism  or 
governmental  confiscation  would  chill  and  paralyze  the 
spirit  of  benevolence,  and  at  the  same  time  stir  into  ac- 
tion the  baser  and  more  selfish  elements  of  human  nature. 
If  the  rights  of  legitimate  private  ownership,  which  have 
existed  through  the  entire  historic  period,  indorsed  by  the 
highest  ethical  teaching,  are  invaded,  whether  by  revolu- 
tion or  through  the  forms  of  law,  it  would  indicate  a  great 
moral  collapse.  All  beneficence  must  be  voluntary,  and 
would  cease  to  exist  with  the  disappearance  of  individual 
ownership. 

If  the  complicated  problem  of  how  to  bestow  large 
charities  without  real  danger  to  character,  through  the 
growth  of  dependence  and  pauperization,  could  be  thor- 
oughly solved,  there  is  little  doubt  but  that  benefactions 
would  be  speedily  multiplied.  Every  student  of  social 
science,  as  well  as  every  would-be  benefactor,  appreciates 
the  difficulties  which  surround  this  question. 

Can  fortunes  be  limited  ?  This  is  a  subject  which  has 
elicited  much  discussion.  If  it  were  possible  for  the  gov- 
ernment to  fix  some  limit,  or  a  graduated  scale  of  taxation 
which  would  amount  to  a  limit,  without  any  violation  of 
personal  rights  or  moral  law,  could  it  be  made  practically 
operative  as  human  nature  is  constituted  ?  Let  us  imagine 
an  attempt  to  establish  a  legislative  maximum  under  a  possi- 
ble socialistic  economy.  Suppose  it  be  placed  at  fifty  mil- 
lions. There  are  perhaps  a  score,  more  or  less,  of  private 
fortunes  in  the  United  States  that  would  be  affected.  But 
others  would  suggest  twenty,  ten,  five  millions,  or  perhaps 
one  million,  as  the  outside  boundary  for  private  ownership. 
Again,  a  large  number  would  vote  for  a  hundred  thousand, 
or  twenty  thousand,  and  still  more  for  five,  and  so  on  down 
to  one  thousand,  or  less,  as  a  final  limit.     As  the  improvi- 


"WEALTH   AND  ITS   UNEQUAL  DISTRIBUTION.      173 

dent  and  unthrifty  are  usually  in  the  majority,  the  proposed 
standard  would  vibrate  downward,  and  endless  controversy 
would  prevent  any  final  settlement.  Let  it  once  be  estab- 
lished that  a  majority,  through  representative  legislation, 
could  vote  money  from  an  individual  without  rendering  an 
equivalent,  and  where  would  be  the  end  ?  There  could  be 
none.  Any  legislative  majority,  however  great,  can  never 
really  change  a  natural  or  moral  law  by  a  hair's  breadth. 

It  is  not  great  fortunes,  per  se,  that  need  excite  appre- 
hension, but  rather  the  means  through  which  they  are 
accumulated.  The  great  necessity  of  the  times  is  a  revival 
of  thorough  honesty,  and  the  sure  punishment  of  its  viola- 
tion. Public  sentiment  must  not  applaud  "  sharp  financier- 
ing "  as  "  brilliant,"  but  denounce  it  as  socially  disgraceful, 
and  punish  it  as  a  criminal  ofi'ence. 

By  sentimental  comparison  there  is  a  general  feeling  of 
relative  poverty  on  account  of  existing  great  private  for- 
tunes. Men  measure  themselves  among  themselves.  But 
no  one  is  absolutely  poorer,  but  rather  richer,  on  account  of 
existing  wealth,  even  though  it  be  controlled  by  private 
ownership.  Every  social  unit  in  the  body-politic  is,  at 
least  indirectly,  better  off  for  general  accumulation.  It  is 
the  human  stock  in  trade,  and  its  lines  of  relationship 
extend  indefinitely  in  all  directions. 

It  is  a  very  common  but  inaccurate  saying,  that  "the 
rich  are  growing  richer  and  the  poor  poorer."  A  superficial 
view  may  give  such  an  impression,  but  any  thorough  re- 
search shows  that  the  latter  part  of  the  assumption  is 
untrue  by  actual  statistics. 

There  have  been  changes  in  general  economic  conditions 
within  the  last  tliirty-five  years,  which  liave  incidentally 
rendered  colossal  accumulations  increasingly  easy  of  attain- 
ment. The  opportunities  afforded  by  the  era  of  inflation 
which  accompanied  the  civil  war  were  unprecedented.  If 
the  Union  had  been  disrupted,  and  the  currency  and  obliga- 


174         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

tions  of  the  government  not  finally  brought  back  to  a  specie 
basis,  the  results  would  have  been  far  different.  Had  infla- 
tion continued  indefinitely,  general  bankruptcy  would  have 
ensued  and  values  largely  vanished.  Such  was  actually 
the  case  with  our  neighbors  of  the  South.  This  shows  the 
application  of  laws  of  great  significance.  Any  era  of  tem- 
porary inflation  furnishes  great  opportunities  for  the  bold 
and  sagacious,  and  for  those  already  rich,  to  add  greatly  to 
their  possessions.  Conditions  and  tendencies  are  foreseen 
and  taken  advantage  of.  Property  rises  in  value  during 
periods  of  inflation ;  and  if  succeeding  contraction  is  fore- 
seen, so  that  it  is  marketed  before  the  inevitable  shrinkage, 
there  is  an  abnormal  profit. 

Normal  conditions,  without  either  inflation  or  contrac- 
tion, are  greatly  to  the  advantage  of  the  wage-earner,  and 
all  others  who  have  little  accumulated  wealth.  The  under- 
lying laws  which  govern  these  alternations  are  so  plain, 
that  it  seems  unaccountable  that  many  would-be  "re- 
formers," "  populists,"  and  "  friends  of  labor  "  persistently 
advocate  inflation,  and  "  cheap  money,"  even  to  the  extent 
of  parting  company  with  the  great  majority  of  the  com- 
mercial world.  A  feverish  inflation  is  the  greatest  calamity 
that  can  happen  to  the  laborer  and  to  all  of  moderate 
means.  The  resulting  increment  goes  to  those  who  already 
have  much  on  hand,  for  values  of  existing  products  are 
expanded.  It  is  true  that  if  the  same  property  is  held 
through  the  succeeding  contraction,  the  shrinkage  balances 
the  inflation ;  but  the  shrewd  and  far-seeing  financier  watches 
the  economic  horizon,  and  generally  avoids  the  decline.  It 
is  the  poor  and  unintelligent  who  are  the  victims  of  such 
fluctuations.  Business  vibrations,  even  if  much  less  intense 
than  those  of  the  civil  war,  give  the  bold  and  wealthy 
operator  great  advantages.  They  directly  kindle  unwhole- 
some speculation,  and  discourage,  not  only  honest  industry, 
but  legitimate  commerce.     An  era  of  inflation  or  cheap 


WEALTH  AND   ITS  UNEQUAL  DISTEIBUTION.      175 

money  —  so  greatly  desired  at  the  present  time  by  mis- 
taken enthusiasts  —  while  making  some  unscrupulous  rich 
persons  richer,  would  be  a  real  misfortune  to  labor,  indus- 
try, agriculture,  and  all  legitimate  business  interests.  It 
does,  indeed,  lend  a  transient  glamour  to  superficial  condi- 
tions, but  its  permanent  effects  are  disappointing  and  dis- 
astrous. It  is  like  the  reaction  which  follows  alcoholic 
intoxication.  We  ask  those  who  are  urging  unlimited 
silver  coinage  or  fiat  money  —  whose  motives  in  many 
cases  we  respect  —  to  seriously  consider  these  immutable 
principles  and  tendencies. 

In  periods  of  inflation  wages  rise  more  slowly  than  the 
necessities  needed  by  the  workman,  and,  as  a  rule,  salaries 
for  personal  service  advance  only  after  considerable  delay. 

Prominent  among  other  more  permanent  and  legitimate 
causes  than  inflation,  which  have  made  the  recent  accumu- 
lation of  great  fortunes  possible,  has  been  the  remarkable 
expansion  of  our  railroad  system.  This  in  rapidity  and 
extent  has  been  unique  and  entirely  unprecedented  in  the 
world's  history.  Within  the  last  two  or  three  decades  a 
territory  larger  than  the  aggregate  area  of  all  the  States 
east  of  the  Mississippi  River  has  been  permeated  and  de- 
veloped by  the  construction  of  these  great  public  highways. 
The  wealth  that  has  been  created  by  this  means  ranges  in 
the  thousands  of  millions.  To  illustrate,  take  an  individ- 
ual case,  and  trace  the  special  opportunities  afforded  for  the 
accumulation  of  wealth  by  this  great  movement.  A  man 
with  great  ability  to  organize  and  execute,  and  with  wise 
forecast,  possessed  of  experience  and  capital,  grasps  the 
boundless  possibilities  of  a  sparsely  settled  and  unpro- 
ductive territory.  He  foresees  that  all  that  is  necessary  to 
transform  its  worthless  acres  into  fruitful  farms,  and  dot 
them  with  flourishing  towns  and  villages,  is  cheap  trans- 
portation. He  projects  vast  schemes  of  railroad  building 
and  executes  them,  not  as  a  philanthropist,  but  as  a  saga- 


ITH         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

cious  business  man.  He  has  faith  in  natural  principles, 
which  show  him  that  the  result  of  his  venture  will  be  a 
domain  occupied  by  thousands  of  thrifty  settlers,  who  will 
furnish  liis  road  with  business.  As  a  result  of  his  energy 
and  persistence,  and  in  strict  accord  with  Natural  Law,  his 
individual  fortune  is,  perhaps,  increased  by  millions,  and  he 
has,  if  honest,  earned  his  reward.  Through  his  instrumen- 
tality there  has  been  added  to  the  capital  of  the  nation,  not 
only  the  railroad,  but  many  times  its  value  in  other  pro- 
ducts and  improvements.  Land,  before  worthless,  becomes 
valuable  and  productive.  Instead  of  a  scanty  growth  of 
sage  brush,  boundless  fields  of  golden  grain  await  the 
advent  of  the  reaping  machine.  Where  an  occasional  herd 
of  buffalo  was  almost  the  only  sign  of  animal  life,  number- 
less droves  of  cattle  and  sheep  are  now  seen  fattening  for 
shipment,  to  supply  the  never-ceasing  food  demand  of  the 
world.  In  place  of  vast  solitudes  broken  only  by  the  pass- 
ing of  an  emigrant  train  or  an  Indian  hunter,  thousands  of 
brawny  farmers  and  laborers  find  employment  and  suste- 
nance. Such  a  great  result  is  the  product  of  the  mental 
force,  possibly,  of  one  man.  He  has  furnished  occupation 
for  thousands  of  workmen  who  would  otherwise  be  left  to 
overstock  the  labor  market.  By  the  amount  of  his  pro- 
duction he  has  fairly  earned  his  fortune.  While  his  own 
wealth  has  been  enhanced,  he  has  caused  indirectly  a  pro- 
duction many  times  greater.  The  transaction  was  only  a 
sale  of  mental  force  at  such  a  price  as  the  world  was  will- 
ing to  pay.  The  case  supposed  is  only  illustrative,  but  it 
is  typical  of  many  occurring  in  real  life.  In  the  accom- 
plishment of  such  results,  truth  is  indeed  "stranger  than 
fiction." 

Other  important  means  by  which  the  opportunities  for 
making  great  fortunes  have  been  multiplied  are  found 
in  the  utilization  of  steam  and  electricity,  and  by  the 
great  number  of  inventions.     These  have  changed  business 


WEALTH  AND  ITS   UNEQUAL  DISTRIBUTION.      177 

metliods,  and  increased  in  almost  geometric  progression  the 
practical  power  and  possible  achievement  of  a  single  indi- 
vidual. Great  personal  ability,  when  supplemented  by- 
such  forces,  becomes  almost  irresistible. 

The  era  just  passed  has  been  a  transition  period.  The 
remarkable  change  in  business  conditions  and  methods  has 
been  so  rapid,  that  comparatively  few  had  the  foresight  and 
courage  to  grasp  promptly  the  golden  opportunities  as  they 
were  presented.  They  were  never  so  numerous  and  prolific 
in  any  past  period,  and  they  furnished  the  special  condi- 
tions by  means  of  which,  perhaps,  nine-tenths  of  the  great 
fortunes  have  been  gathered.  Not  only  the  building,  but 
the  operating,  consolidating,  systematizing,  and,  to  some 
extent,  the  buying  and  selling  of  these  great  highways 
have  contributed  to  the  result.  The  flow  of  general  capital 
into  small  enterprises  of  a  profitable  character  is  easy  and 
rapid,  but  in  great  undertakings  it  becomes  timid  and  sus- 
picious. This  has  put  a  very  high  premium  upon  unusual 
foresight  and  executive  ability. 

The  two  great  estates  of  Astor  and  Stewart  are  in- 
stances of  great  accumulation  that  have  taken  place  outside 
of  these  special  conditions  and  opportunities.  They  rep- 
resent respectively  the  departments  of  real  estate  and 
commerce.  The  Astor  estate  furnishes,  perhaps,  the  most 
conspicuous  example  in  this  country  of  what  socialistic 
writers  call  "unearned  increment."  But  is  there  practi- 
cally any  such  thing  ?  It  is  a  natural  law  that  any  un- 
usual opportunities  for  gain  will  call  out  seekers  and  com- 
petitors. If  unearned  increment  is  such  a  prize  as  we  are 
told,  why  have  not  all,  or  at  least  more,  sagacious  men 
bought  land  ?  Simply  because  they  thought  there  were 
better  investments  elsewhere.  A  careful  examination  will 
show  that,  on  an  average,  a  fair  interest  on  the  money  in- 
vested in  land,  plus  taxes  and  assessments,  will  in  the  end 
amount  to  more  than  the   so-called  unearned  increment. 


178         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

There  are  exceptions  to  this  rule  in  rapidly  growing  cities 
and  in  newly  settled  farming  regions,  but  not  more  than  in 
other  kinds  of  enterprise.  This  theoretic  fallacy  may  be 
disposed  of  by  suggesting  that,  had  there  been  any  greater 
prospect  of  profit  than  in  other  average  investments,  the 
shrewd  business  men  of  America  would  long  ago  have  dis- 
covered it,  and  would  have  invested  more  in  land  and  less 
in  other  objects  and  occupations.  It  is  probable  that  even 
the  Astor  estate  has  paid  out  in  taxes  and  assessments  all 
the  natural  increase  that  has  taken  place,  which  is  in  excess 
of  a  moderate  rate  of  interest  on  its  investments.  Land 
must  advance  in  value  very  rapidly  to  outstrip  these  com- 
bined charges.  The  Stewart  estate  is  an  example  of  what 
individual  brain  power,  exerted  in  harmony  with  Natural 
Law  and  by  its  aid,  can  accomplish  in  the  domain  of  com- 
merce and  traflS-C. 

In  regard  to  railroad  building,  nearly  all  the  available 
territory  is  now  occupied  by  through  or  trunk  lines,  and  in 
future  this  business  will  be  more  confined  to  the  construc- 
tion of  short  and  comparatively  unimportant  feeders.  The 
undeveloped  territory  of  our  own  country  is  becoming  more 
limited.  This  will  narrow  what  has  been  a  most  prolific 
field  for  the  rapid  enhancement  of  capital. 

It  also  seems  improbable  that  we  can  expect  any  such 
radical  progress  in  inventions  and  business  methods  from 
the  present  starting-point  as  has  been  made  in  the  past. 
Better  appliances,  and  a  nearer  approach  towards  perfection 
in  the  application  of  steam  and  electricity,  will  no  doubt  be 
reached ;  but  it  is  not  probable  that  future  improvements 
will  be  as  radical  as  those  of  the  last  half-century.  When 
a  barrel  of  flour  can  be  carried  from  Chicago  to  New  York 
for  less  than  it  costs  to  cart  it  across  either  city,  it  is  evi- 
dent that  the  process  cannot  be  greatly  improved. 

Again,  as  wealth  has  accumulated,  the  competition  of 
capital  with  capital  has  become  more  intense.     Interest,  or 


WEALTH  AND   ITS  UNEQUAL  DISTRIBUTION.      179 

the  selling  rate  for  the  use  of  capital,  as  declined  nearly 
sixty  per  cent.  It  has  gradually  fallen  from  the  old  stand- 
ard of  six  per  cent  to  a  point  Avhich  makes  it  probable 
that  a  two  and  a  half  per  cent  government  bond  can  be 
floated  at  par.  If  the  value  of  wealth  be  estimated  on  the 
basis  of  its  earning  power,  a  million  of  dollars  is  now 
worth  less  than  one-half  of  what  it  was  thirty  years  ago. 
Competition  between  investors  is  so  great  that  almost  any 
railroad,  which  pays  five  or  six  per  cent  dividends  on  its 
stock,  is  in  danger  of  being  paralleled. 

The  general  evenness  of  prices  consequent  upon  tele- 
graphic communication  and  rapid  transportation  is  another 
instance  of  the  lessening  opportunities  for  great  gains  by 
speculative  investments.  Important  changes  in  market 
values  are  discounted  long  in  advance,  and  are,  therefore, 
very  gradual.  Price  fluctuations  being  smaller,  successful 
corners  and  manipulations  become  more  difficult  and  in- 
frequent. 

The  laws  of  inheritance  are  also  great  and  constant 
forces  working  toward  the  disintegration  and  distribution 
of  great  estates.  In  this  country,  with  no  law  of  primo- 
geniture, and  where,  as  a  rule,  there  are  several  heirs  to 
each  estate,  its  dissolution  as  a  great  unit  becomes  very 
probable.  The  Stewart  estate,  before  alluded  to,  is  an 
example.  The  longest  life  is  not  sufficient  for  a  single 
individual  to  absorb  more  than  a  minute  fraction  of  the 
wealth  of  the  community,  and,  Avhether  more  or  less,  the 
probabilities  are,  that  at  his  death  it  will  cease  to  continue 
as  an  organized,  accumulative  force. 

The  laws  of  heredity  are  also  powerful  in  their  wealth- 
dispersing  tendency.  While  there  are  exceptions,  the  sons 
of  very  rich  men  do  not  commonly  inherit  the  peculiar 
accumulative  ability  which  characterized  their  fathers. 
The  dominant  and  controlling  talent  is  generally  greatly 
modified   in  the   son.     Instead   of   a  financier,  inclination 


180         THE  rOHTICAL  ECONOMY  OF  HUMANISM. 

often  leads  him  to  become  an  artist,  a  professional  man,  or 
still  oftcner,  a  gentleman  of  leisure.  In  place  of  the  habits 
acquired  by  an  early  economical  discipline,  are  those  of  an 
extravagant  and  luxurious  character,  incidental  to  his 
position.  He  begins  where  his  father  left  off ;  and,  in 
man}'  cases,  ends  where  his  father  began.  Not  only  the 
exceptional  talent  is  generally  lacking,  but  the  more  neces- 
sary impelling  motive.  Most  of  our  millionaires  began 
active  life  with  little  or  nothing,  and  were  obliged  to 
exercise  self-denial  and  economy  which  laid  the  foundation 
for  their  future  success. 

Statistics  show  that  the  average  life  of  capital  is  not 
equal  to  the  average  life  of  man.  It  is  a  prevalent  idea 
that  the  success  which  has  attended  the  efforts  of  the  few 
is  due,  in  a  great  degree,  to  chance  or  luck ;  but  this  is  a 
mistaken  view.  Favorable  environment  is  important,  but 
exceptional  financial  talent,  bringing  to  its  aid  the  principles 
of  Natural  Law,  improves  and  transforms  its  conditions. 
The  character  of  environment,  therefore,  becomes  largely 
a  matter  of  choice,  rather  than  fixed  and  uncontrollable. 

The  general  average  of  wealth  is  higher  at  present  than 
at  any  previous  time,  partially  as  the  result  of  the  special 
causes  already  enumerated. 

It  seems  probable  that  the  passion  for  sudden  wealth, 
which  has  caused  so  much  imfavorable  comment  by  writers 
of  other  nationalities,  will  diminish  as  conditions  become 
more  stable,  and  opportunities  for  rapid  gain  fewer.  The 
fact  that  the  amount  of  human  happiness  has  but  little 
connection  with  the  amount  of  individual  wealth  will 
become  better  appreciated.  National  life  and  character 
have  hardly  had  time  to  become  adjusted  to  the  changed 
conditions  brought  about  by  the  rapid  expansion  before 
noticed. 

All  classes,  including  the  poorest,  are  greatly  benefited 
by  the  operations  of  capital.     For  illustration,  the  immense 


WEALTH  AND  ITS  UNEQUAL  DISTRIBUTION.      181 

Vanderbilc  and  Gould  estates  represent  most  largely  indi- 
vidual wealth  in  railroads  and  telegraphs.  The  fact  of 
personal  ownership,  with  its  income  of  four  or  five  per 
cent  on  the  investment,  makes  no  difference  with  the  great 
balance  that  goes  directly  to  labor  for  service  and  materials. 
Every  laborer  gets  as  much  as  if  the  property  belonged  to 
ten  thousand  stockholders,  instead  of  large!)'  to  one.  This 
fact  also  makes  no  difference  with  the  productive  power  of 
capital  in  performing  the  multiform  functions  of  society 
and  commerce.  If  there  be  a  difference  in  either  direction, 
the  organization  and  operation  are  usually  more  perfect 
under  concentrated  control.  But,  aside  from  these  great 
public  enterprises,  there  are  large  investments  of  a  private 
nature,  in  the  domain  of  art  and  luxury.  The  palace  of  the 
rich  may  excite  the  envy  of  the  passing  laborer,  but  its 
value  in  money  has  already  been  disbursed  to  the  mechanics 
who  labored  in  its  construction.  Every  piece  of  material 
has  been  changed,  shaped,  and  fitted  from  its  condition  as 
raw  material  by  busy  workmen,  who  have  thereby  had 
occupation  and  subsistence. 

The  great  and  mischievous  fallacy  which  forms  the  basis 
of  socialistic  literature  and  sentiment  may  be  summed  up 
in  a  single  sentence ;  viz.,  that  all  wealth  is  created  by  lahoVy 
and,  therefore,  belongs  to  the  laborers  tvho  have  i^roduced  it. 
This  plausible  proposition  may  also  be  disposed  of  as  briefly. 
The  wealth  does  belong  to  the  labor  that  produced  it,  but 
the  larger  and  ttiore  valuable  part  of  this  labor  was  mental. 
Socialists  ignore  brain  labor,  which  by  Natural  Law  is  much 
the  more  important  of  the  two.  Many  clergymen,  philan- 
thropists, benevolent  and  sentimental  i)eople,  who  are  favor- 
ably impressed  by  some  apparently  humane  and  attractive, 
features  of  socialism,  overlook  this  point.  The  typical 
European  socialist  is  intelligent  and  logical.  He  is  a  mate- 
rialist, and  does  not  believe  in  mind  except  as  being  a 
manifestation  of  matter.     He  therefore  ignores  mind  as  a 


182        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

factor  in  production.  Even  economists  like  Smith,  Mill, 
and  Ricardo  gave  little  attention  to  the  great  part  played 
by  brain-force  in  general  production.  Their  observations 
were  made  prior  to  the  present  era  of  great  invention,  when 
the  influence  of  mental  power  was  not  nearly  so  predomi- 
nant. The  theory  that  mental  effort  is  not  labor,  is  too 
shallow  to  merit  serious  consideration.  Is  not  the  finished 
edifice  as  much  the  work  of  the  architect  as  of  the  mason 
or  carpenter  ?  Does  not  the  student,  clergyman,  merchant, 
or  inventor  labor  ?  On  the  supposition  that  wealth  is  the 
product  of  physical  labor  only,  some  machines  would  have 
very  large  value  when  measured  by  man-power. 

Under  a  government  like  ours,  where  all  enjoy  equal 
rights,  it  is  a  malicious  proceeding  to  foment  class  feuds 
and  arouse  envious  passions.  It  is  an  abuse  of  liberty,  and 
its  fruit  would  be  tyranny  in  new  and  worse  forms. 

During  the  time  in  which  capital  has  decreased  fully 
sixty  per  cent  in  earning  power,  there  has  been  an  increase 
in  the  productiveness  of  labor.  While  wages  have  in- 
creased, their  purchasing  power  has  also  been  enhanced  by 
an  average  decline  in  the  prices  of  food,  clothing,  and  other 
necessities.  As  a  rule,  in  America  we  have  few  idle  rich 
men.  An  eminent  statistical  authority  has  estimated  that 
not  more  than  ten  per  cent  of  the  population  of  America 
have  accumulated  an  amount  of  property  sufficient  to 
enable  them  to  live  upon  its  income  without  personal 
exertion  in  case  they  so  desired. 

The  aggregate  production  is  much  larger,  and  society 
richer,  by  reason  of  the  fact  that  in  accord  with  Natural 
Law,  labor  is  intelligently  directed  and  thoroughly  organ- 
ized by  the  brain  power  of  capital. 

While  the  rights  of  great  wealth,  legitimately  acquired, 
cannot  be  ruthlessly  invaded,  every  rich  man  owes  a  great 
debt  to  humanity.  His  unchallenged  ownership  is  a  social 
trusteeship.     The  passion  of  accumulation,  as  an  end,  is  a 


WEALTH  AND  ITS  UNEQUAL  DISTRIBUTION.      183 

curse,  and  its  inherent  penalty,  though  often  slow,  is  sure. 
Great  financial  ability  involves  a  supreme  test  of  character. 
Avarice  shrivels  the  human  soul.  Capital  is  good  for  the 
man  who  owns  it,  but  if  it  owns  him  it  becomes  tyrannical. 
Such  an  one  is  like  a  bee  submerged  in  its  ovm  honey.  To 
one  who  occupies  a  racial  rather  than  a  selfish  standpoint, 
great  wealth,  as  a  means,  is  a  power  and  an  honor. 


THE  LAW   OF  CENTRALIZATION. 


"  All  roads  lead  to  Rome.'' 

"  Westward  the  course  of  empire  takes  its  loay  ; 
The  first  four  acts  already  past, 
A  fifth  shall  close  the  drama  with  the  day : 
Time's  noblest  offspring  is  the  last.'" 

Bishop  Beekelet. 


"  For  he  that  hath,  to  him  shall  be  given.'" 

Mark  iv.  25. 


"  Even  there,  where  merchants  most  do  congregate.'' 

Merchant  of  Venice. 


"  There  is  America,  which  at  this  day  serves  for  little  more  than 
to  amuse  you  with  stories  of  savage  men  and  uncouth  manners,  yet 
shall,  before  you  taste  of  death,  show  itself  equal  to  the  whole  of  that 
commerce  which  now  attracts  the  envy  of  the  world.'" 

Burke. 


XVI. 

THE  LAW   OF    CENTRALIZATION. 

Everything  has  its  centre.  In  every  department  of 
human  activity  there  is  some  localized  fountain  where 
forces  are  gathered,  and  from  which  they  are  radiated.  All 
organic  growth,  whether  vegetal,  animal,  political,  or  moral, 
starts  from  within  and  progresses  outwards.  As  the  centre 
of  the  solar  system  radiates  his  light  and  heat  in  all  direc- 
tions, so  other  centres  send  forth  their  influences,  whether 
social,  economic,  political,  or  ethical.  But  while  constantly 
giving  out,  they  also  powerfully  draw,  assimilate,  and  con- 
centrate. Paris,  as  a  centre  of  fashion,  not  only  sends  forth 
its  authoritative  modes,  but  at  the  same  time  concentrates 
more  and  more  of  her  own  special  characteristics.  Growth 
once  under  way,  tends  to  gain  in  relative  momentum.  Ten 
talents  are  added  to  ten  more  easily  than  one  to  one.  Cen- 
tralization and  specialization  are  rapidly  augmenting  forces. 

Population  is  heaping  itself  up  in  great  cities,  and 
wealth,  science,  art,  and  industrial  production  are  respond- 
ing to  the  same  law.  These  are  the  results  of  "  natural  se- 
lection," and  amount  to  a  normal  socialism.  The  great  focal 
points  where  human  interests  have  converged  during  the 
historic  period  have  shifted  about.  Rome,  Florence,  Venice, 
Nuremburg,  Vienna,  Paris,  and  London,  at  different  times 
have  been  the  great  fountains  of  human  activity. 

But  the  present  movement  is  quite  unlike  anything  of 
the  past.  Invention,  rapid  transportation,  and  communica- 
tion have  revolutionized  former  methods,  and  the  modern 
metropolis  has  unique  powers  and  possibilities. 

187 


188        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

Any  careful  observer,  who  has  watched  the  currents  of 
trade  in  the  great  commercial  centres  for  some  time  past, 
could  not  have  failed  to  notice  a  constant  tendency  towards 
centralization.  It  has  prevailed  not  only  in  American  cities 
and  towns,  but  throughout  the  commercial  world.  This 
proves  that  it  is  not  in  consequence  of  local  or  special 
causes,  but  the  result  of  influences  which  operate  uniformly 
in  obedience  to  Natural  Law.  This  conclusion  is  further 
confirmed  by  the  fact  that  it  has  not  been  caused  by, 
nor  in  any  way  connected  with,  legislation.  We  therefore 
conclude  that  it  is  a  necessary  feature  of  the  present  great 
development  of  invention  and  civilization. 

The  growth  of  cities  has  been  very  marked,  and  also  the 
expansion  of  the  facilities  for  production. 

There  is  so  much  apprehension  at  present  in  regard  to 
the  possible  power  of  gigantic  monopolies,  that  it  is  worth 
while  to  trace  out  the  working  of  the  natural  economic  laws 
which  have  produced  these  phenomena,  and  also  their  legit- 
imate tendency.  The  present  is  an  era  of  monopolies. 
The  fact  that  a  few  great  firms  or  corporations  in  each  city, 
and  in  each  department  of  business,  are  able  to  attract  a 
large  and  increasing  share  of  the  aggregate  patronage  of  the 
public,  is  patent  to  every  observer.  The  Scriptural  declara- 
tion, that  "  whosoever  hath,  to  him  shall  be  given,"  is  being 
literally  carried  out.  For  illustration,  notice  the  retail  dry- 
goods  trade  in  any  of  our  great  cities.  Years  ago  this 
business  was  transacted  by  a  large  number  of  small  or  mod- 
erate-sized establishments,  scattered  in  different  neighbor- 
hoods. At  the  present  time  the  greater  part  is  transacted 
by  a  few  colossal  establishments.  These  great  institutions 
have,  in  many  cases,  added  building  after  building,  and 
department  after  department,  until  their  proportions  are  of 
astonishing  magnitude.  All  other  branches  of  trade  are 
more  or  less  under  the  control  of  the  same  natural  tenden- 
cies.    There  is  also  a  process  of  centralization  in  locality, 


THE  LAW  OP  CENTEALIZATION.  189 

no  less  marked.  The  larger  cities,  owing  to  their  greater 
facilities  and  attractions,  and  to  the  ease  and  rapidity  of 
communication,  draw  business  from  the  smaller  places  which 
was  formally  under  home  control.  In  addition  to  this, 
there  is  a  decided  grouping  of  each  kind  of  business  in  some 
special  locality.  There  is  a  dry-goods  quarter,  a  banking 
quarter,  and  one  for  almost  every  leading  department  of 
business.  Concentration  in  locality  is  added  to  centraliza- 
tion of  capital  and  enterprise. 

The  operation  of  this  law  in  connection  with  manufac- 
turing is  also  uniform  and  strong.  Kew  industrial  centres 
are  formed  in  conformity  with  natural  conditions  and  ad- 
vantages. 

Another  manifestation  of  centripetal  law  is  seen  in  the 
growth  of  cities.  At  distances  somewhat  \miform,  where 
railroad  systems  converge,  great  commercial  centres  grow 
up,  each  having  its  quota  of  tributary  territory.  Their 
location  and  growth  are  not  matters  of  chance,  as  many 
suppose,  but  entirely  in  accordance  with  fixed  laws.  When 
one  point  gets  a  fair  start  in  advance  of  its  competitors, 
like  a  larger  magnet,  it  has  increased  drawing  power.  It 
seems  to  gain  an  accelerating  momentum,  so  that  any  city 
of  given  size  has  four-fold  greater  growing  qualities  than 
one  half  as  large.  While  the  lesser  may  increase  somewhat, 
it  naturally  pays  tribute  to  the  greater.  This  is  as  irre- 
sistible as  the  law  of  gravitation.  The  centralizing  force 
that  locates  special  kinds  of  business  in  special  places  is 
also  well  defined.  The  milling  industry  of  Minneapolis, 
the  packing  of  Chicago,  the  importing  of  New  York,  are 
examples.  Manufacturing,  although  not  so  thoroughly 
confined  to  single  places,  has  its  focal  points ;  as  Pittsburg 
in  iron,  Lowell,  Lawrence,  and  Fall  River  in  cotton.  Pater- 
son  in  silk,  and  Trenton  in  pottery. 

At  first  glance,  it  looks  as  if  this  condition  of  things, 
especially  in  the  case  of  great  mercantile  concerns,  was 


190         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

abnormal  and  injurious.  Admitting  that  it  has  aspects  of 
this  kind,  let  us  examine  carefully  its  practical  working. 
Imagine  a  typical  American  city,  with  half  a  million  popu- 
lation. Twenty-five  years  ago  its  retail  dry-goods  business 
was  done  by  a  large  number  of  small  shops  in  different 
localities.  Now  it  is  largely  monopolized  by  half  a  dozen 
mammoth  establishments  located  almost  side  by  side. 
What  is  the  effect  of  this  condition  of  things  on  the 
general  public,  comprising  say  four  hundred  and  ninety-five 
thousand  out  of  the  half-million  people  ?  They  show  by 
their  action  that  (unless  they  are  greatly  deceived)  they 
find  lower  prices,  greater  varieties,  and  better  selections  at 
these  great  establishments  than  elsewhere.  We  are  obliged 
to  accept  this  opinion  of  the  great  majority  of  an  intelligent 
public  as  conclusive.  This  disposes  of  ninety-nine  one- 
hundredths  of  the  entire  population  so  far  as  dry  goods  are 
concerned.  The  next  class,  perhaps  five  thousand  persons, 
who,  under  former  conditions,  would  be  in  business  for 
themselves,  are  now  either  junior  partners,  or  employed  on 
salaries  by  these  great  firms.  They  lose  the  net  difference, 
whatever  that  may  be,  between  the  two  following  positions  : 
on  one  hand,  greater  independence  and  the  dignity  of  pro- 
prietorship, but  accompanied  with  uncertainty  of  success ; 
and,  on  the  other,  sure,  but  moderate  success,  with  more 
dependence.  The  fact  that  but  a  small  proportion  of  men 
succeed  when  in  business  for  themselves,  as  shown  by 
statistics,  will  still  reduce  the  net  difference  so  much  that, 
even  with  this  small  class,  it  is  doubtful  which  way  the 
advantage  would  lie.  These  two  classes  comprise  every- 
body except  the  great  firms  themselves,  whose  interests  it 
is  not  necessary  to  consider.  These  great  institutions  have 
attained  their  prominent  positions  by  a  regular  system 
of  evolution,  and  are  fair  illustrations  of  the  "  survival 
of  the  fittest."  Given,  a  rare  combination  of  capital,  ex- 
ecutive ability  and  power  to  organize,  with  favorable  envi- 


THE  LAW   OF  CENTRALIZATION.  191 

ronment,  and  we  have  the  conditions  of  increase  almost 
without  limit. 

In  tracing  still  further  the  operation  of  these  laws,  let 
us,  for  illustration,  again  briefly  notice  two  great  monopo- 
lies, which  are,  perhaps,  popularly  regarded  as  the  most  ob- 
jectionable of  any  in  this  country  ;  viz.,  the  Western  Union 
Telegraph  Company  and  the  Standard  Oil  Company.  It  is 
not  their  private  transactions  with  other  companies,  but 
their  relations  to  the  general  public,  that  we  are  now  con- 
sidering. No  one  is  forced  to  have  business  relations  with 
them,  unless  he  considers  it  for  his  interest.  It  is  in  their 
business  relation  with  the  public,  as  sellers  of  telegraphic 
facilities  and  of  oil,  that  we  now  look  at  them ;  for  they 
have  no  power  otherwise  to  injure  the  average  American 
citizen.  What  is  now  the  Western  Union  Telegraph  Com- 
pany was  formed,  as  nearly  every  one  is  aware,  by  the  con- 
solidation of  smaller  companies  and  the  absorption  of  rival 
but  weaker  organizations.  They  were  willing  and  ready  to 
be  "  absorbed,"  and  were  well  paid  for  the  operation.  The 
prevalent  impression  is,  that  because  this  business  is  almost 
entirely  controlled  by  one  great  organization,  it  necessarily 
becomes  a  dangerous  and  powerful  monopoly,  against  which 
the  public  has  no  protection.  This  prejudice  against  all 
great  corporations  is  a  characteristic  of  the  present  time. 
There  may  be  more  danger  in  the  prejudice,  or  what  may 
come  of  it,  than  in  the  organizations  themselves. 

Our  safety  consists  in  the  fact  that  the  natural  laws  of 
supply  and  demand  are  sovereign,  and  that  there  is  no 
danger  of  their  repeal  or  suspension.  What  are  the  practi- 
cal facts  relating  to  the  telegraph  company  ?  It  is  a  seller 
of  telegraphic  facilities ;  and  the  public,  which  represents 
demand,  holds  the  key  to  the  situation.  The  company  can 
afford  to  sell  its  services  at  a  lower  rate  than  half  a  dozen 
smaller  ones  could  possibly  do.  Will  it  ?  Yes,  in  the 
long  run ;  for  self-interest  will  force  it  in  that  direction. 


192        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

There  is  what  may  be  called  a  normal  rate  for  this  service ; 
and  in  case  the  management  make  a  tariff  above  this  point, 
demand  falls  off  and  profits  shrink  with  as  much  certainty 
as  they  would  in  case  it  were  put  below  it.  Managers  of 
corporations  do  not  always  discover  at  once  how  low  the 
equilibrium  of  such  rates  lies,  and  that  that  point  is  always 
the  most  profitable  ;  but  experience  is  a  persistent  teacher, 
and  these  laws  are  continually  pressing  in  the  right  direc- 
tion, until  they  vindicate  themselves  and  obstructions  are 
removed.  An  illustration  of  the  operation  of  Natural  Law 
in  governing  demand,  is  seen  in  the  effect  of  successive 
reductions  in  the  rate  of  postage.  Every  experiment 
made  by  the  government  in  this  way  has  been  success- 
ful. The  increase  of  business  that  followed  each  reduc- 
tion was  so  great,  that  but  a  very  short  time  elapsed 
before  the  net  revenue  was  larger  than  before.  The 
true  normal  rate  may  still  be  a  little  below  any  point  yet 
reached. 

The  fact  that  railroad  or  telegraph  corporations  have,  or 
have  not,  "  watered  their  stocks,"  is  popularly  supposed  to 
have  a  great  influence  on  their  rates  of  service.  Not  in  the 
least.  If  for  any  speculative  reason  the  stock  of  the  West- 
em  Union  Telegraph  Company  were  largely  increased  or 
diminished  in  its  nominal  amount,  the  management  would 
find  that  it  would  be  entirely  inexpedient,  for  that  reason, 
to  change  its  tariffs.  Its  material  facilities  would  remain 
as  before,  and  so  would  the  demand  for  their  employment- 
In  other  words,  the  normal  point  of  greatest  business  and 
profits  would  remain  the  same,  regardless  of  changes  in  the 
nominal  amount  of  stock. 

We  have  considered  these  extreme  cases  of  monopoly, 
not  because  we  admire  or  defend  them,  but  only  because 
they  furnish  another  illustration  of  the  supremacy  of 
Natural  Law.  They  may  be  powerful  enough  to  influence 
legislation,   but    they    cannot    change    natural    principles. 


THE  LAW  OF   CENTRALIZATION.  193 

Their  business  methods,  and  dealings  with  rivals  and 
competing  organizations,  may  have  been  indefensible,  but 
unvarying  natural  conditions  will  make  them  powerless 
to  harm  the  humblest  American  citizen.  The  man  who 
lets  their  stock  alone,  and  only  buys  their  product,  can 
never  be  harmed.  They  cannot  force  demand,  but  only 
court  it. 

The  most  intense  and  ceaseless  competition  is  that  of 
capital  with  capital.  Often  great  manufactories  run  — 
sometimes  for  years  —  not  only  without  profit  or  interest, 
but  at  a  small  loss  of  principal,  rather  than  to  shut  down. 
To  stop  is  ruinous,  because  skilled  help  is  scattered,  and 
everything  disorganized  excejjt  fixed  charges,  which  go  on, 
and  sometimes  even  increase.  The  public  get  the  benefit 
of  consequent  cheap  production.  So  long  as  freedom  and 
confidence  prevail,  idle  capital  is  always  waiting  to  pour 
into  any  channel  that  promises  a  return  of  four  per  cent 
per  annum. 

We  are  led  to  conclude  that  the  menace  to  government 
and  to  citizens  by  great  business  combinations  is  much 
overrated.  Without  regard  to  legislation,  Natural  Law 
hedges  them  in  on  every  side.  While  great  aggregations 
of  capital,  in  their  operations,  are  subject  to  abuses,  they 
are  great  forces  in  production,  and  have  an  important  place 
in  the  economic  functions  of  society. 

There  is  every  reason  to  believe  that  as  art,  invention, 
and  civilization  continue  to  progress,  centralization  and 
concentration  will  become  still  more  pronounced.  Organ- 
ization in  accord  with  law  is  growing  more  exact  and 
complete.  Large  cities  will  grow  larger  and  specialization 
will  be  more  and  more  thorough.  Each  one  will  do  just 
that  which  he  can  do  the  most  perfectly,  and  thereby 
make  his  services  to  society  of  the  highest  value.  Wher- 
ever cotton,  silk,  wool,  iron,  steel,  ships,  or  any  other 
product  can  be  produced  or  manufactured  with  the  greatest 


104        TnE  POLITICAL  ECONOMY  OF  HCTMANISM. 

facility  and  econom}',  at  those  points  the  inherent  centrip- 
etal and  centrifrugal  forces  will  strengthen.  Everything 
will  have  its  distinctive  headquarters,  and  there  will  be 
concentrated  the  supremest  excellence,  adaptation,  and 
economy. 


ACTION  AND  REACTION,  OR  "BOOMS" 
AND  PANICS. 


*^  Extremes  in  Nature  equal  good  produce; 
Extremes  in  mayi  concur  to  general  msc." 

ropB. 

"  After  a  storm  comes  a  calmy 

"  There  is  in  the  worst  of  fortune  the  best  of  chances  for  a  happy 

change.'^ 

Euripides. 

"  There  is  a  tide  in  the  affairs  of  7nen, 

Which,  taken  at  the  flood,  leads  on  to  fortune; 

Omitted,  all  the  voyage  of  their  life 

Is  bound  in  shallows  and  in  m.iseries. 

On  such  a  full  sea  are  loe  now  afloat; 

And  we  must  take  the  current  when  it  serves. 

Or  lose  our  ventures.^'' 

Julius  Caesar,  Act  IV. 

"  The  time  is  out  of  joint.'''' 

Hamlet,  Act  I. 

"  One  extreme  follows  the  other.'''' 

"  Every  white  will  have  its  black. 

And  every  sweet  its  sour.'''' 

Sir  Cabline. 

"  In  every  affair  consider  what  precedes  and  what  follows,  and 

then  undertake  iW'' 

Epictetus. 

"  Cause  and  effect,  means  and  ends,  seed  and  fruit,  cannot  be 
severed;  for  the  effect  already  blooms  in  the  cause,  the  end  pre-exists 
in  the  means,  the  fruit  in  the  seed.  The  changes  which  break  up  at 
short  intervals  the  prosperity  of  men  are  advertisemerts  of  a  nature 
whose  law  is  growth.'''' 

Ehekson. 


XVII. 

ACTION  AND  EEACTION,  OR  "BOOMS"  AND 
PANICS. 

Polarity  is  not  only  an  economic  but  a  universal  law. 
Wherever  we  turn  in  the  broad  domain  of  nature,  there  are 
the  positive  and  negative,  heat  and  cold,  ebb  and  flow,  gen- 
eral undulation.  Excess  leads  to  deficiency,  and  deficiency 
to  excess.  Things  that  are  the  most  precious,  when  abused 
become  the  most  obnoxious.  Vibration  is  continuous  both 
within  and  outside  of  human  nature.  The  floods  of  spring- 
time are  followed  by  the  droughts  of  summer.  After  ac- 
tivity comes  rest;  after  elevation,  depression;  after  light, 
darkness. 

If  we  soar  above  the  normal  business  level  at  one  time, 
we  will  certainly  fall  below  it  at  another ;  and  the  higher 
the  flight  the  greater  and  more  rapid  the  fall.  The  most 
severe  panics  are  generally  preceded  by  intense  activity  and 
speculation.  The  clouds  may  be  slow  in  gathering,  but 
when  they  break,  like  a  thunder-storm,  they  clear  the 
atmosphere. 

Every  one  is  aware  of  alternations  of  what  are  popularly 
known  as  "good  times"  and  "hard  times."  But  many 
overlook  the  fact  that  they  are  governed  by  fixed  laws,  and 
regard  them  as  matters  of  chance,  or,  at  least,  as  the  result 
of  some  political  or  monetar}'^  circumstance  which  has  but 
little  to  do  with  their  advent. 

A  panic  is  a  fright  or  loss  of  confidence  in  the  stability 
of  existing  conditions.  There  are  gradual  panics,  though 
the  term  is  more  exclusively  applied  to  those  which  are  sud- 
den and  unexpected.     The  antecedents  of  a  depression  may 

197 


108        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

be  vital  and  adequate,  or  possibly  exist  only  in  the  fancy  or 
supposition  of  disaster.  An  alarm  of  fire  in  a  public  gather- 
ing may  cause  a  stampede,  even  if  it  have  no  basis  of  fact. 
The  panic  is  in  the  people.  But  financial  alarm  is  usually 
the  result  of  causes  which  give  a  reasonable  ground  for 
apprehension. 

Until  human  nature  is  evolved  to  a  higher  plane  there 
will  be  flood  and  ebb  tides  in  the  turbulent  sea  of  finance. 
This  would  still  be  true  under  the  most  ideal  political  and 
monetary  system  that  can  be  imagined.  The  feverish  desire 
to  get  much  for  little,  to  gain  profit  by  a  short-cut,  especially 
where  there  are  easy  facilities  for  credit  and  speculation,  al- 
ways leads  directly  to  overtrading  which  is  the  sure  precursor 
of  shrinkage  and  disaster.  The  modern  facilities  for  mak- 
ing large  transactions  by  the  deposit  of  small  sums  called 
"  margins  "  furnish  a  powerful  enticement  for  unhealthful 
expansion.  Artificial  attempts  to  "bear"  or  "bull"  the 
market  lead  many  into  financial  deeps  until  they  are 
submerged.  People  are  never  quite  prepared  for  the 
arrival  of  a  panic,  and  to  many  it  comes  like  "  a  thief  in 
the  night." 

Overtrading  may  take  place  in  real  estate,  stocks,  wheat, 
or  tulips.  Commodities  are  only  the  tools  or  instruments 
which  are  made  use  of  to  gratify  the  desire  for  rapid  and 
abnormal  gain.  It  is  not  legitimate  industry  and  commerce, 
but  unhealthful  speculation,  that  brings  disaster. 

The  fundamental  and  primary  condition  which  results  in 
panic  may  be  expressed  in  one  word,  —  debt.  In  itself,  debt 
is  not  necessarily  an  evil,  but  its  abuse  leads  to  disaster. 
An  experience  of  profit  leads  to  larger  ventures,  and  these 
being  successful  to  still  larger,  until  both  individual  and 
collective  indebtedness  grow  to  great  proportions.  When 
the  crisis  comes,  all  want  what  is  due  to  them,  and  but  few 
are  able  to  respond.  Money  becomes  scarce  and  abnormally 
valuable,  and  productions  unsalable;  except  at  great  sacri- 


ACTION  AND  REACTION,  OR  "BOOMS  "  AND  PANICS.   199 

fice.  Business  is  therefore  paralyzed;  for  all  are  anxious 
to  sell,  and  none  wish,  to  buy.  No  human  prudence  can 
entirely  provide  against  these  con\iilsions,  but  a  study  of 
their  laws  and  causes  may  do  much  to  mitigate  their  sever- 
ity. A  money  market  always  even  and  in  perfect  health 
would  imply  the  prevalence  of  an  almost  infallible  wisdom, 
which  is  nowhere  found. 

In  times  of  business  activity,  the  fuel  is  gradually  gath- 
ered, stick  by  stick,  and  added  to  the  pile  which  is  to  pro- 
duce the  coming  conflagration.  When  the  conditions  are 
ripe,  only  a  spark  is  necessary  to  bring  general  disaster. 
The  proud  fabric  which  has  been  gradually  rising,  the  sta- 
bility of  which  was  unquestioned,  is  dissolved  with  appall- 
ing suddenness. 

The  tulip  mania  in  Holland,  which  occurred  in  1636-7, 
is  a  striking  illustration  of  the  possible  intensity  of  baseless 
speculation  and  succeeding  panic.  A  single  root  was  sold 
for  thirteen  thousand  florins.  The  ownership  of  a  rare  bulb 
was  often  divided  in  shares,  and  many  were  sold  for  future 
delivery  by  people  who  did  not  possess  them,  and  often  the 
article  sold  was  not  in  existence.  The  crash  came  without 
warning,  and  was  most  disastrous  and  complete.  The  re- 
sult was  not  due  in  any  degree  to  bank-note  expansion,  as 
Holland  at  that  time  had  only  a  coin  currency. 

Laudable  undertakings  if  overdone  may  issue  in  panic. 
The  London  South  Sea  Bubble,  and  some  of  the  railroad 
panics  of  America,  are  examples.  They  are  an  evil  which 
no  monetary  system,  however  sound,  can  prevent,  and  gov- 
ernmental measures  are  also  futile  to  avert  them.  With 
the  natural  human  desire  for  rapid  gain,  and  convenient 
facilities  for  speculation,  overtrading  is  a  sure  result.  It 
is  a  peculiar  feature  that  those  most  actively  engaged  are 
less  capable  of  judging  of  the  danger,  and  the  probable  time 
of  culmination,  than  those  who  look  on  from  the  outside. 
An  observer,  even  in  another  country,  will  often  discover 


200        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

signs  of  approaching  catastrophe  which  are  overlooked  by- 
active  participants. 

As  a  rule,  important  panics  are  preceded  by  several 
years  of  prosperity  which  at  length  reaches  a  feverish  and 
unhealthy  stage.  Industry  and  economy  are  at  a  discount, 
and  slow  gains  unsatisfactory.  Production  diminishes  as 
speculation  increases.  Banks  expand  their  circulation  and 
discounts,  and  individual  and  public  credits  are  enlarged. 
Confidence  is  strong,  and  profits  rapid  and  large.  But  at 
length  a  day  of  reckoning  comes.  Some  unexpected  weak 
spot  in  the  financial  edifice  gives  way,  and  every  part  comes 
down,  as  a  row  of  standing  bricks  are  levelled  by  the  fall 
of  one.  Distress,  bankruptcy,  and  liquidation  follow  j  and 
after  a  few  months,  or  years,  the  rubbish  is  cleared  away, 
and  a  slow  and  tedious  process  of  recuperation  sets  in. 
Economy  again  becomes  the  rule,  and  extravagance  the 
exception.  If  the  pendulum  swings  far  in  the  direction  of 
wild  speculation,  it  will  go  with  an  equal  momentum  to  the 
side  of  depression  and  stagnation. 

Our  most  notable  panics  occurred  in  the  years  1822, 
1837,  1857,  1873,  and  1893.  Others  of  much  less  intensity, 
and  somewhat  different  in  character,  occurred  in  1861, 1866, 
1884,  and  1890.  That  of  1837  was,  perhaps,  the  most  severe 
of  all  in  its  immediate  results,  and  the  most  lasting  in  its 
effects.  Ten  years  passed  before  values  fully  recovered  and 
business  resumed  its  normal  activity.  The  principal  ante- 
cedents were  a  great  expansion  of  banking  and  bank  credits, 
and  an  intense  speculation  in  real  estate,  especially  in  New 
York  City.  In  1830  there  were  three  hundred  and  twenty- 
nine  banks  in  this  country,  with  a  capital  of  $110,000,000. 
In  1837  they  had  increased  to  seven  hundred  and  eighty- 
eight,  with  a  capital  of  $290,000,000.  Prices  of  all  com- 
modities advanced  rapidly,  and  industry  and  frugality  were 
at  a  discount.  Many  abandoned  agricultural  pursuits  and 
removed  to  towns  or  cities,  to  speculate  in  real  estate  and 


ACTION  AND  KEACTION,  OR  "  BOOMS  "  AND  PANICS.    201 

enjoy  their  rapidly  increasing  riches.  At  length  the  climax 
was  reached,  and  the  succeeding  crisis  occurred  on  May  10, 
1837.  Careful  estimates  subsequently  made,  showed  an 
actual  shrinkage  of  two  billions  in  the  value  of  the  assets 
of  the  country,  and  an  amount  of  indebtedness  of  six  hun- 
dred millions  wiped  out  by  actual  bankruptcy.  Complete 
specie  resumption  by  the  banks  in  all  the  States  did  not 
take  place  until  1843.  Thousands  who  thought  themselves 
wealthy  lost  all,  and  had  to  make  a  new  beginning  without 
a  dollar.  Labor  was  a  drug,  and  all  property  unsalable 
except  at  ruinously  low  prices.  Values  sunk  as  much  too 
low  as  they  had  before  been  too  high.  Recovery  was  slow 
and  difficult.  It  required  years  of  toilsome  effort  to  ascend 
the  same  hill  that  had  been  descended  at  a  single  leap. 

The  panic  of  1857  was,  perhaps,  next  in  severity,  and 
the  preceding  conditions  were  similar.  The  influx  of  gold 
from  California,  after  its  discovery  in  1848,  was  added  to 
other  speculative  elements,  and  its  effect  was  to  intensify  the 
passion  for  rapid  gain.  The  severe  object  lesson  of  twenty 
years  before  had  been  forgotten,  and  history  repeated  itself. 
The  prostration  was  not  as  severe,  and  the  recovery  more 
rapid  than  before;  but  yet  the  disaster  was  great,  and 
thousands  of  fortunes  were  swept  away.  The  suspension 
of  specie  payments  by  the  New  York  banks,  however,  lasted 
only  fifty-nine  days.  Recovery  to  the  normal  standard  of 
business  and  prices  was  not  quite  complete  in  1860,  when 
the  great  political  events  occurred  which  led  to  the  civil 
war  of  1861.  The  opening  of  hostilities  produced  violent 
changes  and  irregularities  in  our  banking  system,  which 
precipitated  a  crisis  in  the  currency.  This  was  quite 
unlike  the  panic  of  1857,  and  less  severe.  The  bonds  of 
various  Southern  States  had  been  largely  used  in  the  North 
as  a  basis  for  bank  circulation ;  and  as  their  value  rapidly 
declined,  great  confusion  in  our  monetary  system  followed. 
Financial  operations  and  exchanges  were  much  disturbed, 


202        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

until  the  exigencies  of  the  war  forced  the  government  to 
issue  the  greenback  currency,  which  soon  took  the  place  of 
State  bank  issues.  We  are  dealing  with  principles,  and  not 
with  history,  and  will  only  briefly  notice  these  monetary 
changes  and  their  effects.  As  the  war  progressed,  the 
redundancy  of  paper  currency  increased,  and  soon  caused  it 
to  sink  below  a  gold  basis.  This  movement  grew  still  more 
pronounced  when  the  national  banking  system  was  inaugu- 
rated, which  was  another  outgrowth  of  the  financial  needs 
of  the  government.  It  was  devised  to  aid  in  making  a 
market  for  government  bonds,  which  were  made  a  basis  for 
national  bank  circulation.  These  issues,  added  to  those  of 
the  government,  caused  a  still  further  depression  from  a 
specie  basis,  until  at  one  time  their  value  was  less  than 
half  that  of  gold.  A  corresponding  inflation  in  all  prices 
occurred,  as  rapidly  as  an  adjustment  could  take  place,  and 
speculation  was  the  natural  accompaniment.  As  the  vol- 
ume of  currency  increased,  its  purchasing  power  diminished. 
Supply  and  demand  must  come  to  an  equilibrium.  There 
was,  however,  but  little  change  in  prices  when  measured 
by  the  gold  standard,  the  apparent  increase  in  values  being 
in  reality  fictitious  and  artificial.  Those  who  were  saga- 
cious enough  to  keep  their  assets  largely  in  commodities 
during  the  expansion  profited,  in  case  they  turned  them 
into  money  before  the  contraction.  Thus,  we  meet  the  law 
of  supply  and  demand  at  every  turn,  always  uniform  and 
supreme.  The  legislation  of  the  "  Medes  and  Persians " 
could  not  excel  this  principle  in  unchangeableness.  The 
quantity  of  circulating  medium  in  any  country  has  a  direct 
relation  to  the  price  of  its  commodities. 

The  circumstances  preceding  the  panic  of  1873  were 
somewhat  different  from  those  before  noticed.  Its  most 
prominent  cause  was  an  abnormal  amount  of  railroad  build- 
ing. This  is  a  laudable  business,  but  it  is  quite  possible 
to  overdo  it.     There  was  also  an  unusual  amount  of  real- 


ACTION  AND  REACTION,  OR  "  BOOMS  "  AND  PANICS.   203 

estate  speculation,  and  consequent  inflation  of  prices. 
Whatever  single  feature  may  be  the  direct  cause  of  any 
panic,  its  effects  spread  to  other  enterprises,  even  if  entirely 
different  in  character.  As  a  consequence,  other  values 
suffered  nearly  as  much  as  those  of  railroad  stocks. 

By  means  of  debt  and  inflation,  current  values  of  fixed 
forms  of  property  become  too  great  in  proportion  to  the 
existing  volume  of  money.  The  disparity  increases  until 
panic  comes,  which  consists  of  an  excited  bidding  for 
money  by  those  who  must  dispose  of  surplus  property. 
In  their  competition  for  money  they  offer  an  increasing 
quantity  of  commodities  for  it,  which  is  called  a  fall  in 
prices.  A  given  sum  in  this  way  becomes  more  valuable, 
as  measured  by  other  property,  in  accordance  with  supply 
and  demand. 

Alternations  of  prosperity  and  adversity  will  come  at 
intervals,  even  if  the  currency,  tariff,  and  all  other  condi- 
tions were  the  most  perfect  that  could  be  devised.  No 
matter  how  liberal  the  amount  of  the  monetary  medium 
may  be,  when  like  a  flood-tide  the  fever  of  speculative 
enthusiasm  sweeps  beyond  its  normal  limit,  general  appre- 
hension comes,  and  the  inevitable  ebb  follows.  Panics  seein 
to  come  from  a  lack  of  money,  because  it  is  hard  to  get  — 
relatively  dear  —  during  such  periods.  The  real  difficulty, 
however,  is  the  lack  of  confidence.  Even  with  an  unpre- 
cedented volume  of  existing  currency,  when  confidence  is 
destroyed  money  is  hoarded  so  that  the  supply  ajypcars  to 
be  utterly  inadequate.  At  such  times  there  is  a  general 
indisposition  to  invest  and  even  to  pay  obligations  in  the 
usual  way.  People  seem  seized  with  the  impression  that  if 
they  pay  out  what  money  they  have  they  will  novcr  get 
any  more.  The  difficulty  is  located  in  human  fallibility 
and  not  in  external  conditions. 

Disaster  generally  comes  more  from  anticipated  trouble 
than  from  that  which  is  actually  present.     Future  condi- 


204        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

tions  are  discounted  in  "Wall  Street  as  freely  as  promis- 
sory notes.  Sentiment  is  often  as  powerful  as  fact  in  the 
regulation  of  values.  Is  this  due  to  chance  rather  than 
Natural  Law  ?  Not  at  all,  for  sentiment  is  a  natural  law 
in  the  human  constitution.  It  is  a  complex  blending  of 
tendencies  both  within  and  outside  of  man  that  constitutes 
political  economy. 

Earely  are  panics  such  unmitigated  calamities,  or  booms 
such  blessings,  as  they  are  painted  by  the  human  fancy. 
They  have  wrapped  up  in  them  self-regulative  forces  which 
in  due  time  make  their  power  visible. 

"When  everybody  is  buying  it  is  time  to  sell,  for  such  a 
condition  cannot  continue.  The  reverse  is  equally  true. 
"When  under  the  influence  of  a  common  impulse  to  sell, 
values  seem  to  have  no  bottom,  the  wise  investor  will  profit 
by  the  acquisition  of  sound  properties. 

The  panic  of  1890  was  only  an  echo,  though  a  startling 
one,  of  the  collapse  of  the  great  house  of  Baring  Brothers 
in  London.  While  not  accompanied  by  an}"  distrust  of  the 
currency,  it  caused  an  important  shrinkage  in  values  and  a 
general  stagnation  which  was  slow  to  mend.  Financial 
disturbances  in  Australia  and  South  America  also  cast 
their  shadows  over  the  United  States  and  caused  a  con- 
siderable withdrawal  of  English  investments,  all  of  which 
tended  to  retard  recovery.  An  unhealthful  over-capitaliza- 
tion and  speculation  in  "  industrials  "  also  prevailed  between 
the  panics  of  1890  and  1893.  "VV^ith  that  partial  exception, 
the  great  panic  of  1893  was  not  preceded  by  the  unwhole- 
some inflation  in  values  which  usually  forms  the  antecedent 
of  violent  disturbances. 

The  panic  of  1893  was  distinctly  a  currency  panic.  At 
first  glance  it  would  seem  anomalous  that  such  a  disturb- 
ance should  come  at  a  time  when  the  volume  of  currency 
was  unprecedentedly  large  and  constantly  increasing.  But 
the  inception  of  the  disaster  had  to  do  with  its  quality 


ACTION  AND  REACTION,  OR  "  BOOMS  "  AND  PANICS.    205 

rather  than  its  quantity.  The  coinage  of  420,000,000  of 
silver  dollars  of  the  sixteen  to  one  standard,  during  the 
period  from  1878  to  1893,  resulted  in  a  depreciation  of  their 
bullion  value  of  $175,000,000,  or  about  forty  per  cent.  To 
this  already  overweighted  currency  there  was  added  the 
monthly  coinage  of  depreciated  metal  provided  for  by  the 
"  Sherman  law,"  which  was  causing  a  steady  and  persistent 
inflation.  During  the  early  part  of  1893  an  extensive  out- 
flow of  gold  on  foreign  balances  increased  the  general 
apprehension.  The  redemptive  gold  reserve  was  depleted ; 
and  serious  doubts  prevailed,  both  in  Europe  and  America, 
as  to  the  ability  of  the  government  to  maintain  the  parity 
of  gold  and  silver.  A  great  drop  to  a  silver  basis  seemed 
to  be  impending.  From  the  nominal  ratio  of  sixteen  to 
one,  the  bullion  value  had  changed  to  twenty-eight  to  one. 
This  state  of  affairs  led  to  the  return  from  Europe  of  large 
amounts  of  American  stocks  and  bonds,  to  be  realized  upon 
before  the  apprehended  change  should  take  place.  The 
strained  situation  also  led  to  a  general  hoarding  of  gold, 
which  caused  a  sudden  contraction  and  further  loss  of  con- 
fidence. Euns  on  banking  institutions  began,  and  fears  of 
general  disaster  culminated  in  such  a  contraction  that  cur- 
rency in  small  denominations  commanded  a  premium  of 
three  to  four  per  cent.  There  was,  in  reality,  plenty  of 
currency  but  even  more  distrust.  As  money  and  coinage 
are  more  fully  considered  in  a  special  chapter,  these  points 
are  only  briefly  touched  upon  in  this  connection  as  directly 
bearing  upon  the  notable  panic  of  1893. 

The  repeal  of  the  silver  purchasing  clause  of  the  "  Slier- 
man  law,"  Nov.  1,  1893,  by  the  Congress  which  was  con- 
vened for  that  special  purpose,  restored  confidence  and 
assured  the  commercial  world  that  the  existing  volume  of 
silver  coin  would  be  maintained  on  a  parity  with  gold. 
This  could  only  be  done  by  a  free  exchange  of  the  more 
precious  metal  for  silver  coin  whenever  demanded.    Inter- 


206        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

changeability  is  absolutely  necessary  to  the  continuance  of 
equality. 

The  panic  of  1893  was  unique  in  its  inception,  charac- 
teristics, and  outcome.  It  was  also  peculiar  in  the  fact 
that  legislation  was  required  as  a  remedial  measure.  Pre- 
vious faulty  legislation  had  produced  the  disturbance,  and 
its  repeal  was  therefore  required  to  allay  it. 

The  economic  relations  between  the  leading  commercial 
nations  are  now  so  intimate  and  responsive  that  any  finan- 
cial disturbance  in  one  sends  its  corresponding  vibrations 
through  all. 

It  is  probable,  however,  that  the  panics  of  the  future 
will  be  less  severe  than  those  of  the  past.  Present  business 
methods  and  conditions  make  it  improbable  that  such  con- 
vulsions as  those  of  1837  and  1857  will  again  occur.  Rapid 
communication  tends  powerfully  toward  world-wide  even- 
ness of  prices,  and  promotes  the  gradual  discounting  of 
what  would  otherwise  be  violent  fluctuations.  There  is 
also  a  growing  sentiment  against  excessive  individual  in- 
debtedness, and  business  is  more  generally  conducted  on  a 
cash  basis.  International  commerce  also  conduces  to  steadi- 
ness of  prices,  and  any  abnormal  prosperity  or  depression  in 
one  country  receives  a  corrective  influence  from  others. 
There  is  a  better  understanding  of  Natural  Law,  and  a  more 
general  appreciation  of  the  certainty  of  the  penalties  for  its 
violation.  When  all  are  familiar  with  unerring  natural 
principles,  and  have  confidence  in  their  continuous  opera- 
tion, they  will  become  less  susceptible  to  such  impulses  as 
issue  in  a  financial  crisis.  When  exciting  and  disquieting 
rumors  prevail,  even  the  strongest  will  sometimes  lose  their 
equanimity.  Anything  like  a  stampede  in  the  financial 
world  is  disastrous.  Reassuring  influences  are  very  neces- 
sary at  such  times.  Often  a  firm  and  united  stand  taken 
by  the  banks,  with  mutual  assistance  when  necessary, 
accompanied  by  a  temporary  increase  of  circulation,  or  an 


ACTION  AND  REACTION,  OR  "  BOOMS  ""  AND  PANICS.    207 

issue  of  clearing-house  certificates,  will  alleviate  the  worst 
features  of  an  economic  convulsion.  A  subsequent  steady 
and  slow  contraction  on  the  part  of  the  banks,  after  the 
excitement  subsides,  will  generally  take  place,  to  conform 
to  the  changed  business  conditions.  The  greatly  increased 
general  foresight  in  determining  the  future  tendency  of 
market  prices  will  do  much  to  prevent  any  repetition  of 
severe  panics,  for  dangers  foreseen  can  be  largely  avoided. 
Steady  and  even  markets  do  not  present  good  opportunities 
for  speculation  and  rapid  accumulations  by  the  unscrupu- 
lous, but  are  favorable  for  labor  and  all  legitimate  business 
and  industry. 


MONEY   AND   COINAGE. 


"  For  ivhat  in  worth  in  anything 
But  so  much  money  as  Hwill  bring  ?  " 

Butler. 


^^  Money  alone  sets  all  the  world  in  motion.''^ 

PUBLIUS. 


The  love  of  money  is  the  root  of  all  eviV 

1  Timothy  vi.  10. 


^'^  Remember  that  time  is  moneys 

Franklin, 


"  Silver  and  gold  are  not  the  only  coin ;  virtue  too  passes  cur- 
rent all  over  the  world." 

Euripides. 


"  It  is  a  condition  which  confronts  us —  not  a  theory." 

Grover  Cleveland. 


''Gold!     Gold!     Gold!     Gold! 
Bright  and  yellow,  hard  and  cold." 


Hood. 


XVIII. 
MONEY  AND  COINAGE. 

There  is  perhaps  no  other  department  of  economics 
where  so  many  and  diverse  theories  prevail,  as  in  that 
which  pertains  to  the  monetary  circulating  medium.  The 
endless  profusion  of  papers,  opinions,  and  Congressional 
speeches  that  have  been  put  forth  by  impracticable  theorists 
during  the  recent  past,  tends  to  muddle  and  complicate  prin- 
ciples which  in  themselves  are  natural  and  simple.  Preju- 
dice, partisanship,  and  supposed  sectional  interests  color 
personal  opinion,  and  the  result  is  seen  in  distorted  and 
fragmentary  views  of  natural  unchanging  principles.  An 
imagined  diversity  of  interest  of  sections  and  parties  is 
fatal  to  a  search  after  truth,  for  that  is  always  unitary.  It 
would  be  as  absurd  to  suppose  that  the  same  cause  could 
produce  health  in  the  right  side  of  the  human  organism  and 
disease  in  the  left,  as  to  believe  that  any  monetary  policy 
could  at  the  same  time  have  a  prosperous  and  adverse  effect 
in  different  parts  of  one  nation.  Diversity  of  interest  is 
only  on  the  surface. 

It  is  obviously  beyond  the  scope  of  this  work  to  consider 
technically,  in  a  single  chapter,  a  subject  tliat  alone  would 
fill  a  larger  volume  if  exhaustively  treated.  Historical  and 
statistical  aspects  are  of  interest  to  the  student  of  economic 
science,  but  the  average  reader  will  find  more  ])rofit  in  a 
concise  study  of  inherent  and  fundamental  principles.  Lot 
us  make  a  judicial  search  for  the  uncolored  trutli. 

What  has  Natural  Law  to  do  with  money  and  coinage  '.'' 
Does  it  give  any  indication  as  to  the  kind  and  quality  of  a 

211 


212         THE  POLITICAL  ECONOMY  OF  HUilANISM. 

normal  or  ideal  currency  ?  Does  it  shed  any  light  upon  bi- 
metallism or  monometallism,  gold,  silver,  nickle,  or  copper? 
Yes,  it  touches  these  questions  on  every  side. 

The  present  circulating  medium  is  the  result  of  a  long 
'evolutionary  process.  In  Colonial  times  tobacco  was  a  legal 
tender  currency  in  Maryland  and  Virginia.  In  other  colonies, 
coon  skins,  beaver  skins,  and  musket  balls  were  extensively 
used  as  money.  As  late  as  1866  hand-made  nails  passed 
current  in  some  of  the  secluded  villages  of  France.  From 
1785  to  1787  a  limited  coinage  of  cents  and  half  cents  was 
made  by  private  parties  in  several  States  under  the  authority 
of  legislative  Acts.  In  1786  Massachusetts  passed  an  Act  to 
establish  a  State  mint  for  the  coinage  of  cents  and  half  cents. 
The  United  States  mint  was  not  established  until  1792. 

It  is  natural  that  there  should  be  some  current  represen- 
tative of  value.  The  most  perfect  system  of  barter  is  un- 
suited  to  an}^  condition  above  the  plane  of  barbarism.  Money 
represents  stored-up  labor,  otherwise  it  would  be  valueless. 

Conceding  the  necessity  of  a  currency,  what  should  be 
its  qualities  ?  The  most  important  requisite  is  stability  of 
value.  So  far  as  is  possible,  it  must  be  rendered  indepen- 
dent of  fluctuation  in  value  and  volume.  To  have  a  cur- 
rency constantly  liable  to  grow  cheaper  or  dearer,  either 
through  the  changing  temper  of  legislation,  or  variations  in 
the  bullion  value  of  metals,  is  prejudicial  to  legitimate 
industry  and  commerce. 

Steadiness  being  the  great  desideratum  of  an  ideal  cur- 
rency, what  are  its  factors  ?  Objectively  they  are  two,  and 
they  are  often  so  blended  that  a  distinct  line  can  hardly  be 
drawn  between  them.  The  first  is  the  intrinsic,  or  natural 
element  —  which  consists  of  the  stored-up  labor  embodied 
in  bullion  —  and  the  second  is  the  fiat  of  legislation. 

An  illustration  of  the  natural  element  is  found  in  the 
early  history  of  California.  Immediately  subsequent  to  the 
gold  discoveries  of  1849  the  currency  consisted  of  that 


MONEY  AND  COINAGE.  213 

metal,  first  in  the  form  of  dust,  and  afterwards  of  private 
assay  put  in  the  general  form  of  coins.  The  stamp  of  well- 
known  and  responsible  firms  upon  a  piece  of  gold  of  re'm- 
lation  weight  and  fineness  made  it  locally  current  as  a 
monetary  medium.  Being  of  equal  bullion  value  with 
governmental  coinage,  it  circulated  for  some  time  side  by 
side  with  it,  until  a  full  supply  of  the  latter  finally  dis- 
placed it.  It  was  not  a  counterfeit,  for  it  did  not  resemble 
the  national  issues,  but  having  a  full  natural  value  it  did 
not  require  any  of  the  artificial  or  fiat  element. 

The  governmental  stamp  upon  a  disk  of  metal  is  merely 
a  certificate  of  its  weight  and  fineness.  In  itself  it  adds 
no  value  except  as  it  confers  the  privilege  of  an  inter- 
change with  something  else  of  higher  value.  For  example, 
the  present  silver  dollars  of  the  United  States,  even  though 
bearing  the  official  device,  would  soon  sink  to  their  natural 
value  were  not  the  public  honor  pledged  to  keep  them  at  a 
parity  with  gold  through  interchangeability.  So  long  as  an 
inferior  thing  can  be  freely  exchanged  for  a  superior,  it  will 
be  its  equal  through  the  aid  of  an  artificial  element,  which 
consists  of  that  privilege. 

Some  would-be  political  economists  place  great  stress 
upon  the  artificial  element  in  currency,  and  consider  the 
governmental  fiat  fully  adequate  to  create  value.  Kot  so. 
A  purely  fiat  currency  might  have  some  value  by  being 
made  receivable  for  national  dues ;  but  lacking  a  redemptive 
basis,  it  could  never  be  otherwise  than  artificial  and  uncer- 
tain. Unless  kept  in  very  restricted  volume,  it  would 
invariably  depreciate  from  the  real  monetary  standard.  It 
would  lack  any  solid  commercial  foundation.  Value  must 
be  earned,  and  cannot  be  created  even  by  a  great  nation. 
It  must  possess  stored-up  labor.  It  is  value  only  from  the 
fact  that  it  costs  something. 

The  precious  metals,  on  the  basis  of  natural  cost  and  gen- 
eral demand,  have  the  same  value  throughout  the  couuner- 


214         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

cial  world,  but  within  the  limits  of  different  governments 
the  artificial  element  of  legislation,  or  legal-tender  value, 
is  blended  in  varying  degree.  But  this  is  all  eliminated, 
and  cuts  no  figure,  in  international  commerce  and  exchanges. 

It  may  be  admitted  that  the  same  volume  of  currency 
changes  in  potency  in  special  seasons  of  prosperity  or  ad- 
versity ;  but  this  is  not  the  fault  of  the  money,  but  of  the 
uncertain  moods  of  humanity. 

Besides  the  two  objective  elements  of  value  —  the  nat- 
ural and  artificial  —  already  noted,  there  is  also  a  very 
important  subjective  factor  known  as  confidence.  It  is  an 
invisible  currency  in  itself,  for  it  pieces  out  that  which  is 
in  sight.  It  is  never  lacking  in  its  connection  with  natural 
value,  but  it  fluctuates  greatly  in  its  combination  with  that 
which  is  legislative  or  artificial.  Its  scarcity  often  proves 
a  greater  calamity  than  the  actual  deficiency  of  its  material 
counterpart. 

In  times  of  panic  and  depression,  superficial  observers 
locate  all  the  ills  in  the  lack  of  a  sufficient  circulating 
medium,  while  often  the  only  want  is  confidence.  People 
are  doubtful  about  the  stability  of  the  artificial  conditions. 
"When  there  is  an  apprehension  that  the  existing  grades  of 
cheaper  money,  whether  silver  or  paper,  may  break  away 
from  an  equality  with  the  standard,  in  spite  of  the  efforts 
of  the  banks  or  government,  there  is  a  currency  panic.  Con- 
fidence is  the  barometer  that  is  always  testing  the  future  of 
the  artificial  element  in  money. 

In  more  primitive  times,  owing  to  permanent  distrust, 
transactions  were  at  once  closed  with  real  rather  than 
representative  money.  But  with  the  growth  of  the  modern 
commercial  spirit  and  a  higher  civilization,  there  has  been 
a  great  and  continuous  increase  of  confidence.  This  has 
formed  a  basis  for  credit,  through  the  use  of  which  both 
domestic  and  international  commerce  has  enormously  in- 
creased.    It  has  also  furnished  a  field  for  the  universal 


MONEY  AND  COINAGE.  215 

use  of  bills  of  exchange,  drafts,  checks,  and  other  repre- 
sentatives of  real  money.  So  long  as  there  is  no  doubt  in 
regard  to  ultimate  redemptability,  almost  an  unlimited 
amount  of  business  can  be  transacted  with  monetary  repre- 
sentatives. But  with  the  prevalence  of  any  unsound  finan- 
cial theories,  of  present  or  prospective  faulty  legislation, 
or  of  any  sort  of  departure  from  conservative  solidity  as 
to  basis,  apprehension  begins,  and  real  money  is  demanded 
because  its  representatives  are  distrusted.  This  leads  to 
panic  and  subsequent  stagnation,  as  illustrated  in  1893. 
With  an  undoubted  currency  and  a  prevailing  sense  of 
moral  trusteeship  in  corporate  management,  "  good  times  " 
would  be  perpetual.  Confidence  forms  the  key-stone  in  the 
arch  of  prosperity. 

The  more  perfect  the  banking  system  and  the  sounder 
the  financial  policy  of  any  country,  the  greater  is  the 
amount  of  business  that  can  be  transacted  on  any  given 
reserve  of  real  money.  The  balances  settled  in  a  single 
week  at  the  New  York  Clearing  House  are  often  more 
than  the  entire  circulating  medium  of  the  nation. 

The  world's  international  currency  —  Avhich  represents 
gold — consists  of  bills  of  exchange ;  that  of  domestic  whole- 
sale trade  and  banking  transactions,  of  drafts  and  checks, 
and  even  of  the  domestic  retail  trade  only  a  small  part  is 
transacted  by  the  means  of  real,  or  basal  money. 

The  evolution  of  the  banking  system  of  the  iMiited 
States  during  the  last  thirty-five  years  has  been  remarkable. 
With  all  the  existing  popular  prejudice  against  national 
banks,  they  are  a  vast  improvement  over  any  system  of  the 
past.  It  is  true  that  the  amount  of  governmental  bonds 
which  forms  their  basis  is  diminishing,  so  that  some  im- 
portant modifications  may  be  necessary  in  tlie  near  future, 
nevertheless  they  have  served  a  great  purpose. 

Previous  to  the  civil  war  there  were  as  many  kinds  of 
currency  as  there  were  States.     The  bank  issues  of  many 


216         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

sections  were  uncurrent  outside  of  their  own  sectional 
territory,  and  only  salable  to  brokers  at  a  discount.  In 
many  cases  their  security  was  precarious,  the  chances  for 
redemption  in  any  considerable  amount  doubtful,  and  their 
ultimate  valuation  problematical.  Counterfeits  were  numer- 
ous and  difficult  of  detection,  often  requiring  the  services 
of  an  expert.  The  direct  losses  to  holders  of  this  heteroge- 
neous currency  amounted  to  millions  yearly,  to  say  nothing 
of  the  general  business  derangement  which  resulted. 

The  present  uniform  value  of  the  National  bank  issues 
throughout  the  length  and  breadth  of  the  country,  the  posi- 
tive security  to  bill  holders,  even  in  the  case  of  occasional 
bank  failures,  and  the  immunity  from  counterfeits,  alto- 
gether form  a  striking  contrast  with  former  conditions. 
Whether  or  not  this  system  will  gradually  be  superseded  by 
national  issues  and  a  sub-treasury  plan,  is  not  a  vital  ques- 
tion in  its  relation  to  Natural  Law.  Circumstances  alone  will 
determine  the  relative  preponderance  of  the  two  systems. 
Both  accord  with  sound  principles  so  long  as  an  adequate 
reserve  of  standard  money  is  pledged  to  their  redemption. 
Under  either  system  sharp  fluctuations  in  the  volume  of 
the  circulating  representatives  of  money  must  be  avoided. 

National  banks  are  considered  as  a  "  monopoly  "  by  some ; 
but  so  long  as  they  are  organized  under  general  laws  and 
not  special  "Acts,"  it  is  difficult  to  see  the  propriety  of 
such  a  characterization.  The  fact  that  there  is  some  volun- 
tary retirement  among  them,  and  that  their  average  divi- 
dends do  not  now  excel  other  well-managed  enterprises, 
does  not  comport  with  popular  impressions  regarding  their 
exceptional  advantages  for  profit.  Iconoclasm  is  sometimes 
useful,  but  a  disposition  to  pull  down  tested  institutions  with 
the  idea  of  replacing  them  with  financial  vagaries  is  unwise. 

Turning  from  money  in  its  broad  sense  to  basal  money 
—  or  coin — we  find  that  through  the  entire  historic  period 
gold  and  silver  have  been  the  chosen  embodiments  of  value 


MONEY   AND  COINAGE.  217 

among  nations  of  any  considerable  degree  of  civilization. 
Natural  selection  has  taken  them  from  among  the  metals 
for  such  a  function  because  the  labor  involved  in  their  pro- 
duction renders  them  both  scarce  and  precious.  This  con- 
fers large  value  in  compact  form  —  more  especially  in  the 
case  of  gold  —  and  it  is  further  enhanced  by  their  beauty 
and  comparative  incorruptibility.  Their  practical  utility, 
however,  in  hand-to-hand  transactions  is  still  limited  by 
weight  and  bulk  as  compared  with  their  available  represen- 
tatives. The  important  abrasion  of  gold  is  also  a  sei-ious 
obstacle  to  its  constant  use.  The  coined  metal,  therefore, 
mainly  rests  in  bank  vaults  or  depositories,  while  its  more 
portable  agents  —  printed  notes  —  perform  its  function.  In 
modern  commerce,  however,  its  office  is  still  more  largely 
delegated  to  checks,  drafts,  and  bills  of  exchange.  These, 
though  temporary,  are  representatives  of  current  money, 
as  bank  notes  are  representatives  of  real  money,  or  stand- 
ard coin.  The  active  office  or  duty  of  coin  is  therefore 
almost  entirely  delegated. 

There  are  two  different  ways  of  measuring  the  value  of 
money.  One  is  by  the  varying  amount  of  products  that  it 
will  command,  and  the  other  by  its  degree  of  usefulness 
as  shown  in  the  current  rate  of  interest.  The  recent  in- 
crease of  purchasing  power  —  in  spite  of  the  larger  amount 
of  circulating  medium  per  capita  —  does  not  prove  tliat 
money  is  growing  dearer,  but  that  the  instruments  of  pro- 
duction have  been  improved.  There  has  been  a  marked 
decline  in  the  general  rate  of  interest.  The  latter  in  any 
free  market  represents  the  general  consensus  of  opinion  ;is 
to  its  desirableness  and  possible  utility.  IntereM  could  not 
decline  if  money  ivere  not  relativeli/  mure  plentiful.  Bids 
for  the  use  of  money  must  be  as  exact  and  conclusivo  aa 
rentals  offered  for  houses  or  farms.  Sui)ply  and  deniand 
in  each  and  all  cases  is  the  arbiter.  As  indicated  by  the 
dual  test  of  volume  and  interest,  the  circulating  medium,  of 


218         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

whatever  comjwsed,  has  been  steadily  growing  cheaper. 
The  same  is  true  as  measured  by  wages,  taking  the  average 
of  all  grades.  These  facts  are  noted  in  refutation  of  some 
popular  prevailing  sectional  theories. 

Assuming  that  gold  and  silver  compose  the  normal  and 
universally  accepted  coin-currency,  what  is  the  teaching  of 
Jv^atural  Law  concerning  them?  First,  that  in  reality  there 
cannot  be  two  standards,  any  more  than  there  can  be  two 
yardsticks.  Bimetallism  now  and  in  the  future  should  be 
regarded  as  meaning  two  metals  rather  than  a  double  stand- 
ard. It  is  a  rational  and  practical  accomplishment,  but 
two  different-sized  measures  are  mathematically  impos- 
sible. As  well  different-sized  bushels,  or  lighter  and 
heavier  pound  weights.  To  keep  the  distinction  between 
two  metals  and  two  standards  clearly  in  mind,  will  aid 
in  the  study  of  this  much-befogged  problem. 

Natural  Law  and  evolution  would  indicate  that  with  the 
immense  modern  accumulation  of  wealth  and  the  greatly 
augmented  volume  of  commerce,  there  would  be  a  corre- 
sponding tendency  toward  a  more  valuable  and  concentrated 
monetary  basis.  Among  barbarous  tribes  the  currency  is 
composed  of  beads  and  shells ;  and,  as  ascending  steps  in 
civilization  are  taken,  iron,  copper,  nickel,  silver,  and  gold 
come  respectively  into  relative  use  in  an  advancing  order  of 
value.  Evolution  is  a  universal  princii:)le.  Things  that  are 
cumbersome  and  inefficient  are  continually  being  displaced 
by  those  of  greater  perfection.  There  is  really  nothing 
more  strange  or  revolutionary  in  the  basal  substitution  of 
gold  for  silver,  than  in  that  of  electricity  for  horse-power, 
or  railroad  service  for  that  of  the  stage-coach.  Where 
wages  are  not  more  than  ten  or  fifteen  cents  per  day,  as  in 
China,  small  copper  coins  of  trifling  value  can  still  be  util- 
ized ;  but  with  the  advance  of  values  and  civilization,  im- 
proved tools  and  instniments  are  a  natural  accompaniment. 

The  ratio  of  valuation  between  gold  and  silver  bullion 


MONEY   AND   COINAGE. 


219 


has  vibrated  somewhat  during  the  whole  historic  period, 
but  never  before  has  the  divergence  been  so  wide  as  at  the 
present  time.  As  in  every  other  department,  the  relations 
are  entirely  governed  by  supply  and  demand. 

Herodotus  estimates  the  ratio  of  gold  to  silver  as  1  to 
13,  Plato  as  1  to  12,  Menander  as  1  to  10,  and  in  Caesar's 
time  it  was  1  to  9.  For  some  time  previous  to  the  discov- 
ery of  the  rich  silver  mines  of  Potosi,  in  the  sixteenth  cen- 
tury, the  ratio  was  about  1  to  11:^,  and  in  the  early  part  of 
the  seventeenth  centurj^,  1  to  12i.  In  the  present  century, 
previous  to  the  great  gold  discoveries  of  California,  it  was 
between  lo|  and  16 ;  and  afterwards,  in  spite  of  the  enor- 
mous increase  in  gold,  it  only  fell  back  to  15.41. 

The  following  table,  estimated  from  reports  of  the  ^lint 
Bureau,  will  show  the  remarkable  change  in  the  ratio  of 
gold  and  silver  that  has  taken  place  since  1873  :  — 


CAI-E^•I)AS 
TEAB. 

VALUE  OF  FINE 
OUNCE  AT  AVEB- 
AGE  QUOTATION. 

BULLION   VALUE 

OF  U.   B. 
SILVER  UOLLAB. 

GOLD 
BATIO. 

1873 

$1.30 

$1,004 

15.9 

1874 

1.28 

.989 

16.2 

1875 

1.25 

.96 

16.6 

1876 

1.16 

.89 

17.9 

1877 

1.20 

.92 

17.2 

1878 

1.15 

.89 

17.9 

1879 

1.12 

.869 

18.4 

1880 

1.14 

.886 

18 

1881 

1.14 

.886 

18 

1882 

1.13 

.878 

18.2 

1883 

1.11 

.868 

18.0 

1884 

1.11 

.808 

18.6 

1885 

1.06 

.82 

19.4 

1886 

.99 

.709 

20.8 

1887 

.98 

.757 

21.1 

1888 

.94 

.727 

22 

1889 

.93 

.72 

22.3 

1890 

1.05 

.809 

19.7 

1891 

.99 

.76 

20.9 

1892 

.87 

.67 

23.7 

18931 

.81 

.025 

26.6 

18932 

.71 

.66 

28.4 

1 

.  Average  flr»l  8  niont 

II.       2.  Novpnib«T  lit 

220         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

The  remarkable  change  as  shown  above  is  due,  not  only 
to  the  recent  discoveries  of  enormous  deposits  of  silver, 
but  also  to  the  discontinuance  of  silver  coinage  by  the 
leading  nations  of  Europe,  and  recently  by  the  United 
States.  Germany  discontinued  silver  coinage  in  1870,  at 
the  close  of  her  war  with  France,  and  gradually  put  her 
enormous  stock  of  that  metal  upon  the  markets  of  the 
world.  This  was  like  taking  a  heavy  weight  from  one 
scale  of  a  balance  and  placing  it  in  the  other,  thereby 
doubly  changing  the  relation.  The  Latin  Union  also  joined 
in  the  same  movement,  and  the  departure  of  silver  from  its 
nominal  and  legislative  ratio  became  more  and  more  pro- 
nounced. For  some  time  prior  to  the  action  of  the  United 
States  in  1893,  Europe  was  virtually  out  of  the  market  for 
silver  bullion  for  coinage  purposes.  The  currency  panic 
of  1893  was  caused  by  the  apprehension  of  the  inability  of 
the  United  States  to  maintain  a  parity  even  under  limited 
coinage  pro%dded  for  under  the  "  Sherman  law." 

The  Old  World  for  three  years  had  been  returning  our 
securities,  fearing  that  a  drop  to  a  silver  basis  might  be 
imminent.  Thus  the  crisis  came,  not  because  of  too  little 
money,  but  from  the  fear  that  an  increasing  redundancy 
might  at  any  time  result  in  depreciation.  Every  one 
wished  to  stand  from  under  what  was  impending.  The 
world-wide  trend  was  yet  further  indicated  by  the  fact  that 
India,  which  had  always  furnished  a  very  extensive  mar- 
ket for  silver,  joined  in  the  general  movement  for  a  gold 
basis  in  the  autumn  of  1893. 

It  has  for  some  time  been  evident  that  nothing  less  than 
a  general  international  agreement  would  so  increase  the 
demand  for  silver  as  to  gradually  close  the  great  chasm 
which  now  exists  between  its  actual  and  nominal  value. 
But  it  is  even  doubtful  whether  or  not  a  great  international 
combination  would  be  able  to  permanently  restore  the 
former  ratio.     Should  it  at  once  make  the  effort  to  artifi- 


MONEY  AND  COINAGE.  221 

cially  raise  silver  so  much  above  its  natural  level,  the 
production  of  that  metal  -would  be  immensely  stimulated. 
It  is  quite  probable  that  in  a  few  years  the  artificial  would 
again  have  to  yield  to  the  natural.  Even  nations  cannot 
prevent  this.  Furthermore,  as  has  already  been  intimated, 
such  a  step  would  seem  to  be  backward  from  an  evolution- 
ary standpoint. 

It  is  doubtless  possible  to  maintain  a  parity  of  gold  and 
silver  coin  in  the  United  States,  so  long  as  no  further 
additions  of  the  latter  are  made,  and  thus  practical  bi- 
metallism can  be  continued.  But  with  any  impairment 
of  the  public  confidence,  either  as  to  the  ability  or  intention 
of  the  Government  to  do  this,  a  process  of  gold-hoarding 
could  not  be  prevented.  A  minority  in  Congress,  who  with 
great  persistence  advocated  the  "  free  and  unlimited  coin- 
age of  silver,"  upon  the  former,  or  a  slightly  increased 
ratio,  call  themselves  bimetallists,  but  it  is  diJSicult  to  see 
the  propriety  of  such  a  designation.  Such  a  measure 
would  inevitably  bring  about  silver  monometallism.  This 
was  so  clearly  apparent,  even  under  the  restricted  coinage 
of  the  "  Sherman  law,"  that  the  panic  of  1893  was  the 
result.  It  is  hardly  necessary  to  suggest  that  the  moment 
that  gold  commands  any  premium,  either  through  appre- 
hension or  real  scarcity,  it  will  cease  to  be  currency  and 
disappear.  This  would  amount  to  a  sudden  contraction 
of  the  available  circulating  medium,  but  that  would  be 
but  one  of  the  many  disasters  which  would  result  from  a 
drop  to  a  silver  standard. 

No  metal  can  really  become  a  standard  unless  it  pos- 
sesses international  acceptability.  There  are  no  walls 
between  nations,  and  the  commercial  world  is  virtually  a 
greater  unit.  Under  modern  conditions  different  countries 
are  neighbors,  and  no  one  can  disregard  the  action  of  the 
others. 

The  "  silver  question  "  has  no  class,  partisan,  or  sectional 


222        THE  rOLITICAL  ECONOMY  OF  HUMANISM. 

significance.  Aside  from  the  few  owners  of  silver  mines, 
the  whole  country  would  suffer  and  become  financially  dis- 
organized by  a  drop  to  silver  monometallism.  This  is  as 
true  of  the  poor  as  of  the  rich ;  of  labor  as  of  capital ;  of 
the  agriculturalist  as  of  the  manufacturer,  and  of  Colo- 
rado as  of  New  York.  In  cases  of  general  inflation,  as 
during  the  civil  war,  wages  and  salaries  are  always  the 
last  things  to  rise  to  the  full  proportion  of  material  pro- 
ducts. A  sound  and  stable  financial  system  is  advantage- 
ous to  all  sections.  Any  theoretic  diversity  of  local  inter- 
ests is  the  result  either  of  demagogism  or  of  ignorance. 

Suppose  for  the  sake  of  argument  that  it  would  be  a 
temporary  advantage  for  a  ''  debtor  section  "  —  if  such  can 
be  truly  said  to  exist  —  to  pay  its  obligations  in  a  cheapened 
currency,  it  would  finally  prove  a  very  mistaken  policy.  A 
high  credit  is  vastly  more  valuable  than  temporary  profit  if 
such  were  possible.  This  is  particularly  true  of  the  newer 
States  where  capital  is  needed  for  development.  The  tem- 
per of  public  opinion  as  represented  in  the  legislation  of 
each  State  determines  its  credit  and  standing  in  the  finan- 
cial world.  It  is  for  the  interest  of  States  to  keep  their 
credit  so  high  that  both  they  and  their  inhabitants  can 
make  loans  at  low  rates  of  interest.  Capital  is  attracted  to 
such  localities  and  becomes  cheap  and  plentiful.  Every 
degree  of  the  element  of  doubt  adds  directly  to  the  rate  of 
interest  in  an  increasing  ratio. 

Nothing  could  be  more  permanently  harmful  to  the 
debtors  of  a  State  than  special  legislation  which  is  theoreti- 
cally in  their  favor. 

It  is  often  claimed,  and  with  some  plausibility,  that 
within  the  last  twenty  years  gold  has  grown  abnormally 
dear  at  the  same  time  that  silver  has  been  cheapening. 
But  even  if  this  were  abstractly  true,  the  practical  fact 
remains  that  the  general  currency  —  which  has  gold  for 
its  basis  —  has  cheapened.     This  was  noted  in  the  early 


MONEY   AND    COINAGE.  223 

part  of  this  chapter  as  proved  by  its  average  relation  with 
products  and  wages,  and  also  by  the  decline  in  rates  of 
interest.  With  the  great  modern  utilization  of  the  various 
representatives  of  money,  a  vastly  greater  business  can  be 
transacted  upon  any  given  amount  of  the  ultimate  standard 
than  in  the  past.  In  domestic  commerce,  coin  cuts  but  a 
small  figure,  and  in  international  transactions  it  is  only 
used  for  balances. 

But  the  confidence  in  coin  representatives,  as  to  their 
ability  for  redemption,  must  be  unlimited.  Confidence  is 
the  great  "power  house"  of  the  business  world.  If  all 
distrust  of  the  currency  and  of  labor  friction  could  at  once 
be  eliminated,  an  era  of  prosperity,  natural  and  solid,  would 
come  to  remain. 

If  the  present  supply  of  gold  is  in  any  degree  inadequate 
for  the  basal  monetary  standard,  that  fact  will  stimulate  its 
production  the  world  over.  The  available  supply  of  the 
native  metal  is  inexhaustible,  and  demand  always  brings 
supply.  With  scientific  mining  methods  generally  adopted, 
experts  assert  that  the  annual  product  can  be  speedily 
doubled.  At  the  same  time  the  cheapening  of  silver  will 
greatly  lessen  its  production,  and  this  will  prevent  an  in- 
definite continuance  of  the  very  rapid  decline  of  the  past 
decade. 

While  but  one  monetary  standard  is  possible,  so  long  as 
the  divergence  between  gold  and  silver  did  not  amount  to 
more  than  one  or  two  per  cent,  a  practical,  though  not  a 
mathematical  double  standard  apparently  continued.  Hut 
that  time  has  past  with  no  prospect  of  return. 

With  gold  as  the  basal  standard  —  even  with  silver  so 
greatly  depreciated  —  a  large  volume  of  the  hitter  can  he 
floated  and  utilized  at  a  parity.  But  the  amount  of  Kilver 
must  never  become  so  excessive  as  to  cause  any  doubt 
regarding  their  free  interchangeability.  The  volume  of 
inferior  coined  metal  that  can  be  utilized  in  any  country 


224        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

depends  much  upon  the  customs  of  the  people.  The  exten- 
sive use  of  a  silver  coin  currency  among  the  peasantry  of 
France  enables  that  country  to  float  a  large  amount  per 
capita,  while  in  the  United  States  it  cannot  be  extensively 
utilized  except  through  its  representatives. 

By  Xatural  Law,  there  is  but  one  way  to  provide  for 
bimetallism  in  any  country ;  and  that  is  to  make  the  more 
precious  metal  the  standard,  and  then  float  such  an  amount 
of  the  cheaper  metal  as  can  be  kept  upon  an  undoubted 
equality  through  free  interchangeability.  If  an  attempt  be 
made  to  make  the  cheaper  of  two  metals  the  standard,  the 
dearer,  under  all  possible  circumstances,  will  disappear. 

Currency  panics  are  inevitable  if  any  element  of  doubt 
exists  as  to  prompt  redemption  whenever  required.  With 
prevailing  unimpaired  confidence  the  only  use  of  the  coin 
standard  is  for  redemptive  reserves  and  foreign  balances. 
It  is  like  a  yardstick  that  is  only  occasionally  brought  out 
to  verify  the  professed  length  or  width  of  fabrics. 

The  principles  regarding  money  and  coinage  that  have 
been  outlined  are  ti-ue  because  they  are  natural.  "With  the 
elimination  of  the  artificial  elements  that  have  been  in- 
jected into  the  subject  by  sectionalism,  partisanship,  and 
one-sided  aspects,  difficulties  vanish,  and  unity  and  har- 
mony are  seen  to  be  reasonable. 


TARIFFS  AND   PROTECTIOM. 


*^Idleness  and  pride  tax  with  a  heavier  hand  than  kings  and 

parliaments.    If  we  can  get  rid  of  the  former,  xoe  may  easily  hear 

the  lattery 

Fkanklin. 

He  smote  the  rock  of  the  national  resources,  and  abundant 

streams  of  revenue  gushed  forth.'" 

Webster  on  Hamilton. 

**  All  government  —  indeed,  every  human  ben^t  and  enjoy- 
ment, every  virtue  and  every  prudent  act  —  is  founded  on  compro- 
mise and  barter.'''' 

Burke. 


XIX. 

TAKIFFS  AND  PROTECTION. 

A  BRIEF  study  of  the  relation  of  tariffs  to  Natural  Law 
seems  proper,  but  any  partisan  or  dogmatic  treatment  of 
the  subject  would  be  entirely  foreign  to  the  spirit  and 
purpose  of  this  work.  Underlying  principles  can  be  in- 
telligently traced  out  only  by  an  unbiased  search  for 
truth  for  its  own  sake. 

The  formulation  of  a  customs  tariff  is  a  work  so  com- 
plex and  many-sided,  that  it  requires  both  impartial  and 
expert  treatment,  but  even  with  the  best  of  these  the 
result  is  imperfect.  A  tariff  is  an  elastic  expression  of 
national  policy,  and  is  based  upon  conditions  which  are 
constantly  changing,  therefore  it  has  none  of  the  exact- 
ness of  Natural  Law,  though  it  has  relations  with  it. 

As  a  question  of  party  politics  it  is  warped  and  twisted 
by  the  partisan  press,  and  the  average  politician  finds  it 
difficult  to  see  more  than  one  side.  Being  purely  a  prac- 
tical economic  problem,  requiring  the  impartial  study  of 
the  best  financial  and  ethical  talent,  it  is  unfortunate  that 
it  has  a  political  mask  fastened  upon  it.  Partisan  preju- 
dice and  expediency  directly  prevent  the  very  thing  most 
necessary  —  a  calm  and  judicial  study  to  determine  the 
greatest  good  for  the  greatest  number.  So  long  as  it 
continues  to  be  a  political  shibboleth,  prejudice  rather 
than  unmixed  truth  will  be  the  determining  feature.  Op- 
posite aspects  of  the  question  are  dwelt  upon  out  of  pro- 
portion, until  the  existing  tariff,  whatever  it  may  be,  to 
different  observers,  is  made  responsible  for  all  prevailing 
good   and  all  existing  ills.     Men   of  undoubted   integrity 

227 


228         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

and  patriotism  almost  become  willing  that  the  whole  coun- 
try should  suffer,  in  order  that  some  party  policy  may 
be  vindicated,  political  capital  secured,  and  the  opportu- 
nity afforded  to  declare,  "  I  told  you  so."  The  "  outs " 
attribute  all  calamities  to  the  tariff  of  the  "  ins, "  and  too 
much  or  too  little  tariff  is  made  the  "  scapegoat "  for  the 
sins  of  the  nation.  Few  think  of  studying  the  subject 
until  they  put  on  a  pair  of  partisan  glasses.  The  "outs" 
feel  that  the  salvation  of  the  country  depends  upon  their 
becoming  "ins."  Facts  are  made  to  bend  to  theories  un- 
til they  reach  the  snapping  point.  As  a  matter  of  scien- 
tific research,  it  would  be  interesting  to  determine  by  what 
mental  process  able  and  honorable  men  and  newspapers 
on  both  sides  become  psychologized  by  party  platforms 
and  prejudices.  Some  great  Republican,  Democratic,  or 
other  political  psychic  wave  rolls  over  the  country  and 
lifts  men  off  their  feet,  and  they  become  as  children  in 
its  embrace. 

A  customs  tariff,  whether  higher  or  lower,  is  a  less  im- 
portant factor  in  a  nation's  welfare  than  is  generally  sup- 
posed. Business  conditions  are  elastic,  and  are  not  long 
in  adjusting  themselves  to  a  revenue  system.  But  a  very 
imperfect  tariff  which  is  permanent,  and  known  to  be  so, 
is  preferable  to  any  schedule  which  is  prospectively  change- 
able. One  of  the  great  drawbacks  to  commercial  pros- 
perity is  the  almost  continual  apprehension  of  changes  in 
the  revenue  system. 

All  tariffs  are  artificial,  and  all  are  obstructions  to  the 
free  courses  of  trade  and  commerce.  "While  this  is  true, 
they  may  be  expedient  and  politic.  Aside  from  the  protec- 
tive element,  they  are  the  most  natural  ways  and  means  for 
raising  a  national  revenue.  They  are  less  cumbersome  and 
more  popular  than  direct  taxation,  and  in  varying  degree  the 
foreign  producer  also  contributes  toward  the  desired  result. 

Tariffs  may  be  framed  for  revenue  only,  for  revenue 


TARIFFS   AND   PROTECTION.  229 

with  incidental  protection,  or  for  revenue  and  protection. 
If  revenue  only  be  desired,  the  object  is  most  easily  accom- 
plished by  the  imposition  of  duties  upon  articles  of  general 
consumption  that  are  not  of  possible  domestic  production. 
For  example,  tea  is  incapable  of  home  growth,  and  being  an 
article  of  almost  universal  consumption,  a  very  large  revenue 
would  be  possible  by  the  imposition  of  a  moderate  duty. 
As  a  revenue  producer,  a  high  tariff  is  often  less  success- 
ful than  a  lower  one,  because  the  former  tends  to  limit 
consumption. 

Revenue  with  incidental  protection  would  embrace  ar- 
ticles of  both  domestic  and  foreign  productioa,  the  prices  of 
which  are  somewhat  enhanced  by  the  duties  imposed.  The 
protective  element  is  the  largest  in  the  duties  upon  those 
things  that  are  capable  of  unlimited  home  production,  and 
that  also  are  largely  made  elsewhere.  The  present  tariff, 
owing  to  the  events  of  the  past  three  years,  has  afforded 
far  less  than  the  needed  expenses  of  the  government,  and 
it  has  necessarily  been  supplemented  by  an  increase  of 
internal  revenue  which  need  not  here  be  considered. 

As  at  present  organized,  the  two  great  parties  of  the 
country  —  the  Republican  and  Democratic  —  represent,  re- 
spectively, distinct  protection  with  revenue,  and  revenue 
with  some  incidental  protection.  This  can  only  be  taken  as 
an  average  statement,  as  indicated  by  personal  exponents 
and  political  platforms.  In  the  Republican  ranks,  opinions 
are  shaded  from  high  to  very  moderate  protection,  and 
among  Democrats  from  moderate  protection  to  free  trade. 

The  brief  study  here  proposed  of  a  few  fundamental 
principles  underlying  the  revenue  system  is  thoroughly  un- 
partisan  in  intention.  We  think  that  each  party  places 
undue  emphasis  upon  certain  phases  of  this  complicated 
and  ever  recurring  problem.  The  importance  of  the  ele- 
ment of  American  labor  values  is  underestimated  by  many 
Democrats;    and,  on  the  other   hand,  some    Republicans 


230         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

greatly  overestimate  the  potency  of  a  protective  tariff,  and 
forget  that  it  is  purely  a  policy,  and  lacks  the  basis  of  a 
universal  principle.  The  question  of  an  American  tariff 
is  only  a  question  of  American  expediency. 

Could  a  commission  of  economic  experts  be  formed  with 
a  single  aim  for  justice  and  the  public  welfare,  occupying 
an  American  standpoint,  and  uninfluenced  by  political  ties 
and  questions  of  party  advantage,  they  would  be  able  to 
outline  a  very  perfect  revenue  system.  But  with  existing 
partisan  prejudice  and  unsound  theory  among  legislators, 
and  motives  of  personal,  political,  and  sectional  policy,  the 
obstacles  to  an  ideal  result  are  great.  Added  to  the  difficul- 
ties already  enumerated  is  the  general  fact  that  any  tariff 
bill  that  can  possibly  receive  the  support  of  a  majority  in 
the  Congress  must  naturally  embody  a  general  compromise. 

It  may  be  noted,  as  a  rule,  that  the  adoption  of  any  new 
schedule  is  generally  fatal  to  the  continuance  in  power  of 
the  party  that  is  responsible  for  it.  Numberless  concessions 
and  compromises  have  to  be  granted  and  a  great  variety  of 
sectional  interests  placated.  It  thus  becomes  a  system  of 
shreds  and  patches,  without  consistent  unity.  As  no  section 
or  interest  gets  quite  all  it  asks,  there  is  general  dissatisfac- 
tion. Besides,  the  '*  outs  "  —  whoever  they  may  be  —  pick 
innumerable  flaws ;  and  before  time  has  permitted  a  thorough 
test,  a  reactionary  wave  results  in  a  vacation  for  the  domi- 
nant party.  All  this  produces  a  restlessness  unfavorable  to 
business  adjustment.  A  tariff,  once  intelligently  adopted, 
should  embody  a  fixed  policy,  to  be  depended  upon.  Under 
such  a  plan  but  few  and  slight  modifications  would  be  neces- 
sary during  a  decade.  To  make  tariff-policy  a  party  "  foot- 
ball," is  to  sacrifice  general  prosperity  to  political  vagaries. 
It  cannot  be  denied  that  both  parties  share  in  the  responsi- 
bility of  keeping  up  this  interminable  unrest. 

The  presence  of  the  protective  element  in  a  revenue 
system  can  only  be  approved  when  there  is  some  peculiar 


TARIFFS   AND   PROTECTION.  231 

local  or  national  condition  to  be  maintained.  Without  such 
a  reason  for  its  presence,  it  seems  to  savor  of  exclusiveness, 
if  not  of  unfriendliness.  Among  the  nations  of  Europe,  in 
their  relations  to  each  other,  there  appears  to  be  little  valid 
reason  for  a  protective  accompaniment  to  revenue  systems. 
Labor  values  and  general  conditions  being  not  very  unlike, 
any  special  measure  of  protection  seems  illogical.  Protec- 
tion, in  its  nature  being  an  artificial  intervention,  should 
always  have  a  sound  reason  for  its  employment. 

Has  the  United  States  valid  ground  for  some  general 
system  of  protection,  in  connection  with  its  duties  for 
revenue  ?  From  a  purely  cosmopolitan  standpoint,  no ;  but 
from  a  national  point  of  view  we  think  it  has.  The  one 
reason  why  American  protection  should  be  moderately  im- 
posed against  the  nations  of  the  Old  World,  is  involved  in 
the  question  of  labor-values. 

It  is  everywhere  admitted  that  the  average  workman  of 
America  enjoys  a  distinctly  higher  standard  of  living  than 
his  European  brother.  As  a  rule,  he  is  better  educated,  of 
higher  tastes,  accustomed  to  greater  comforts  and  more 
privileges,  therefore  his  requirements  are  enlarged.  What 
will  satisfy  his  foreign  competitor  will  not  satisfy  him. 
The  fact  that  he  is  a  sovereign  in  a  land  of  freedom  and 
political  equality,  that  he  is  not  bound  to  any  fixed  class, 
and  has  individual  aspirations,  also  enhances  his  material 
demands.  Through  the  influence  of  superior  environment 
he  is  on  a  higher  plane  than  the  equally  skilled  foreign 
producer.     Can  he  be  kept  there  without  artificial  aid  ? 

The  instruments  that  facilitate  production,  under  the 
great  advantages  offered  by  modern  transportation,  are 
becoming  very  evenly  distributed.  Any  important  inven- 
tions or  labor-saving  machines,  even  if  of  American  origin, 
are  patented  and  utilized  in  European  countries  almost 
simultaneously  with  their  appearance  here.  Raw  materials, 
so  called,  are  constantly  approximating  to  general  even- 


232        THE  POLITICAL  ECONOMY  OP  HUMANISM. 

ness  of  value.  To  offset  the  difference  in  transportation, 
the  Old  World  also  has  some  advantages  in  lower  rates  of 
interest,  more  capital,  organization,  and  specialization.  A 
large  number  of  our  workingmen — now  American  citizens 
—  came  from  the  Old  World ;  but,  though  some  conditions 
may  be  more  favorable  here,  it  cannot  be  claimed  that  a 
mere  change  of  residence  has  materially  increased  their 
productive  ability.  In  view  of  all  these  facts,  there  seems 
to  be  but  one  way  to  maintain  a  distinction,  and  that  is, 
through  reasonable  though  conservative  protection.  Water 
will  gain  a  level  unless  some  kind  of  a  barrier  prevents  it. 

It  is  not  probable,  however,  that  in  the  absence  of  all 
protection,  American  wages  would  decline  fully  to  the 
European  level,  but  they  would  approximate.  A  newer 
country,  naturally  affording  greater  opportunity  and  enter- 
prise, always  possesses  advantages  for  the  workingman, 
other  things  being  equal ;  but  as  time  passes,  the  gradual 
tendency  is  towards  equalization. 

Suppose  that  two  factories  —  one  in  Old  and  the  other 
in  New  England  —  are  producing  the  same  kind  of  goods 
for  the  American  market.  The  English  proprietor  with 
equal  enterprise  obtains  all  the  most  approved  appliances, 
and  his  raw  material  is  approximately  of  the  same  cost. 
But  suppose  the  American  proprietor  pays  his  help  two 
dollars  per  day,  while  the  Englishman  gets  his  for  one. 
Can  this  continue  unless  the  English  product  is  made  to 
contribute  a  part  of  the  difference  ?  Such  a  disparity  in 
labor  value  is  constantly  appearing  in  numberless  forms. 
If  all  bars  were  taken  down,  could  the  American  manufac- 
turer successfully  compete  with  his  foreign  rival  unless  he 
be  able  to  obtain  labor  at  about  the  same  price  ?  Having 
attempted  to  state  the  proposition  fairly,  we  leave  the 
solution  to  the  reader's  logic. 

But  protection  is  neither  a  full  panacea,  nor  a  tool  where 
the  edge  is  all  on  one  side.     A  bigoted  protectionist  is  as 


TARIFFS   AND   PROTECTION.  233 

illogical  as  a  free-trade  doctrinaire.  Protective  measures 
must  be  employed  with  great  care,  otherwise  they  overreach 
their  usefulness.  There  is  always  difficulty  in  maintaining 
artificiality.  Though  the  American  market  —  embracing 
above  70,000,000  of  the  greatest  consumers  in  the  world  — 
is  of  immense  proportions,  our  manufacturers  are  constantly 
reaching  out  to  demands  that  are  world-wide.  This  pre- 
sents another  phase  of  the  question.  To  aid  such  enterpris- 
ing and  laudable  efforts,  the  duties  upon  necessary  raw 
materials  must  be  removed,  or  at  least  very  delicately  ad- 
justed. Principles  of  possible  reciprocity  should  also  be 
carefully  considered.  No  general  rules  are  possible,  for 
among  all  artificial  conditions  each  must  be  separately  con- 
sidered upon  its  merits.  The  fact,  too,  that  nations,  like 
individuals,  have  their  prejudices,  should  not  be  overlooked. 
Any  tariff  which  seems  partial  or  specially  unfriendly  is 
likely  to  provoke  retaliation.  The  possibilities  of  a  grow- 
ing reciprocity  are  worthy  of  the  study  of  statesmen  and 
economists. 

Does  the  agricultural  producer  lose  by  the  slightly 
enhanced  prices  he  may  have  to  pay  for  certain  products 
in  consequence  of  their  being  moderately  protected  ?  Not 
if  the  domestic  market  for  the  fruits  of  his  own  toil  is 
broadened  and  improved,  for  this  may  more  than  offset 
the  difference. 

No  tariff  in  itself,  however  wisely  constructed,  will 
make  "good  times."  In  fact,  unless  it  be  intelligently 
adjusted,  it  may  prove  an  unhealthful  stimulant.  If  it  be 
so  abnormal  as  to  cause  any  rapid  and  undue  domestic 
expansion  or  over-production,  severe  reaction  will  ensue. 
A  wholesome  principle  that  is  overdone  becomes  unwhole- 
some. This  law  should  be  borne  in  mind  by  partisans  on 
both  sides.  There  are  so  many  silent  and  unseen  compen- 
satory forces  at  work  under  any  probable  system  of  duties, 
that  dogmatism  upon  the  subject  is  unprofitable.     Radical 


234         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

differences  among  the  most  eminent  and  conscientious  ob- 
servers attest  its  intricacy  and  complexity.  It  is  not  the 
creation  of  Natural  Law,  and  that  fact  gives  great  room  for 
theorizing. 

The  subject  of  raw  material  has  already  been  touched 
upon.  But  there  is  considerable  difficulty  found  in  an 
exact  definition  of  that  term.  Wool  is  "  raw  material  "  to 
the  manufacturer,  but  the  farmer  considers  it  as  finished 
product.  If  it  be  made  free,  the  wool-producer  feels  that 
he  is  brought  into  direct  competition  with  cheap-labor 
countries,  and  therefore  unfairly  treated.  Thus  endless 
frictions  crop  out  with  any  possible  tariff.  Every  special 
industry,  town,  section,  and  State  is  dissatisfied  unless  its 
peculiar  interests  are  specially  considered.  Thus,  in  the 
words  of  a  former  presidential  candidate,  the  tariff  becomes 
largely  "a  local  issue."  A  coal  producing  section  desires 
coal  protection,  while  coal  consumers  urge  its  free  entrj". 
Trenton  would  like  to  see  pottery  well  taken  care  of,  and 
Patterson,  silk,  and  so  on  indefinitely. 

Everyone  is  aware  that  there  are  two  kinds  of  duties 
levied  on  imports,  known  respectively  as  specific  and 
ad  valorem.  In  many  cases  the  two  are  combined,  thus 
making  the  customs  duties  complicated  and  cumbersome. 
Specific  duties  are  much  more  simple  than  those  based 
upon  valuation.  Opportunities  for  inequality  and  even 
fraud  are  often  found  through  inexact  appraisement  or  un- 
der-valuation.  Whether  higher  or  lower,  the  simplification 
of  the  American  tariff  is  in  the  highest  degree  desirable. 

As  a  matter  of  history,  the  protective  principle  has 
often  been  of  practical  benefit  in  the  incipient  stage  or 
early  development  of  special  industries.  Continued  for  a 
few  years  it  has  sometimes  enabled  them  to  grow  from 
feeble  beginnings  to  enterprises  of  great  importance.  In 
some  such  cases  production  has  become  so  perfect  that  the 
necessity  for  its   continuance  has  been  outgrown.     Consu- 


TARIFFS   AND   PROTECTION.  235 

mers  have  reaped  a  benefit  by  being  able  to  get  better  goods 
at  lower  prices  than  -would  previously  have  been  possible 
with  free  entry. 

A  few  of  the  general  principles  involved  in  the  formula- 
tion of  a  tariff  may  be  concisely  hinted  at  as  follows.  Is 
the  article  capable  of  unlimited  home  production,  so  that 
domestic  competition  will  protect  the  consumer  ?  If  so, 
and  not  yet  developed,  will  the  temporary  disadvantage  of 
the  consumer  work  to  his  interest  in  the  long  run  ?  If  an 
article,  like  sugar  for  instance,  is  only  capable  of  limited 
home  production,  it  may  be  assumed  that  the  consumer  will 
have  to  pay  all  the  tariff  imposition,  much  the  same  as 
though  it  were  all  imported.  In  cases  where  the  domestic 
production  is  large,  but  yet  has  direct  competition  with  the 
imported  article,  the  duty  is  virtually  shared  between  the 
foreign  producer  and  American  consumer.  Unless  an  in- 
crease of  revenue  is  imperatively  demanded,  all  articles 
incapable  of  domestic  production  should  be  upon  the  free 
list.  The  non-dutiable  schedule  should  also  be  extended 
to  include  articles  of  limited  domestic  production  that  are 
incapable  of  becoming  unlimited.  With  any  practical  or 
probable  unlimited  home  production,  the  interests  of  the 
domestic  consumer  will  be  safe.  Any  special  grades  of  a 
general  article,  as  of  wool,  that  cannot  be  produced  at  home, 
should  come  in  free. 

If  politics  could  be  eliminated,  it  seems  probable  that 
in  the  light  of  sound  economic  principles,  as  briefly  outlined 
above,  an  impartial  tariff  might  be  devised  which,  while 
not  fully  meeting  sectional  views  and  demands,  would,  on 
an  average,  be  just  to  all. 

The  fact  should  not  be  overlooked  that  the  tariff  is  not 
responsible  for  the  decline  of  special  industries  where  there 
has  been  a  change  in  natural  conditions.  For  instance,  the 
production  and  working  of  iron  and  steel  have  decayed  in 
some  sections,  not  on  account  of  the  tariff,  but  because  cer* 


236        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

tain  localities,  as  Pittsburg  and  Birrainghara,  are  able  to 
bring  ore  and  coal  together  at  lower  rates  than  are  possi- 
ble elsewhere.  Business  will  go  to  the  cheapest  producing 
points,  and  nothing  can  prevent  it.  As  before  suggested, 
all  tariffs  are  obstructions,  abstractly  considered.  If,  in 
the  future,  national  interests  become  broadened  and  univer- 
salized, the  natural  tendency  will  be  toward  a  freer  inter- 
national exchange  of  products. 


THE   MODERN  CORPORATION. 


"  miile  they  are  subject  to  abuses,  they  are  great  forces  in  pro- 
duction, and  have  their  place  in  the  economic  functions  of  society." 

"  Corporations  cannot  commit  treason,  nor  be  outlaived,  nor 

excommunicate,  for  they  have  no  souls." 

Sib  Edward  Cok£. 


XX. 

THE  MODERN  CORPORATIOlSr. 

The  corporation  has  been  a  mighty  instrumentality  in 
the  evolution  of  modern  social  conditions.  In  the  steady 
growth  and  diffusion  of  the  peaceful  arts  and  industries 
among  men,  especially  in  the  accomplishments  of  the  last 
few  decades,  its  force  has  been  paramount.  We  can  hardly 
conceive  of  the  universal  paralysis  that  would  touch  every 
phase  of  modern  social  life,  if  we  were  suddenly  thrown 
back  to  a  condition  of  absolute  dependence  upon  personal 
units. 

As  the  relation  of  the  corporation  to  the  shareholder 
is  touched  upon  elsewhere,  only  its  general  relations  to 
society,  in  the  light  of  Natural  Law,  will  here  be 
considered. 

The  merits  and  demerits  of  the  present  application  of 
the  corporate  principle  are  the  subject  of  much  popular 
discussion ;  and,  here  as  elsewhere,  in  order  to  reach  the 
bed-rock  of  logical  truth  we  must  discriminate  between 
that  which  is  normal  and  its  prevalent  abuses. 

Corporate  operation  is  ubiquitous.  Any  effort  to  live 
independent  of  its  aid  would  at  once  result  in  the  most 
primitive  conditions.  It  is  an  agency  through  which 
human  accomplishment  is  not  only  mechanically,  but 
vitally  multiplied.  It  builds  and  operates  our  railroads, 
telegraphs,  steamships,  and  factories,  develops  our  mines, 
transports  our  persons  and  property,  manufactures  our 
goods,  and  gives  employment  to  both  labor  and  capital.  It 
is  peculiar  to  a  high  order  of  social  and  moral  development, 

239 


240         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

and  is  not  found  to  any  extent  elsewhere.  Natural  Law, 
as  embodied  in  organization,  is  responsible  for  its  existence 
and  importance.  It  takes  small  units,  and  builds  them  up 
into  those  which  are  much  greater. 

Organization,  as  manifested  on  every  plane,  is  charac- 
terized by  force  and  utility.  It  is  omnipresent  in  the 
physical  world,  erecting  and  cementing  unities  out  of  the 
most  diverse  materials. 

Those  nations  and  peoples  who  possess  the  genius  for 
organization,  and  understand  its  power,  are  distinguished 
for  the  number  and  variety  of  their  corporations.  Such 
were  the  ancient  Romans,  and  in  Rome  corporate  organiza- 
tions had  their  early  development.  The  corporation  of 
to-day,  in  Europe  and  America,  is  a  later  and  broader  utili- 
zation of  the  principle  that  was  found  useful  by  Rome 
when  she  was  mistress  of  the  world. 

In  general,  corporations  are  divided  into  several  classes, 
embracing  the  municipal,  religious,  educational,  eleemosy- 
nary, and  those  of  a  commercial  or  business  nature.  As 
the  latter  compose  the  department  under  consideration,  we 
shall  confine  our  attention  to  them. 

Business  corporations  are  creations  of  the  State,  formed 
for  the  prosecution  of  enterprises  which  cannot  be  carried 
on  so  efficiently  by  individuals.  Their  object  is  the  en- 
hancement of  the  comfort  and  welfare  of  the  whole  people ; 
but  there  was  a  time,  in  England,  when  royal  charters  con- 
ferred special  and  exclusive  privileges.  They  are  creations 
that  have  rights  and  obligations  of  their  own,  which  are 
unlike  those  of  their  individual  corporators. 

A  corporation  is  not  like  a  single  great  capitalist.  Its 
shareholders  are  usually  people  of  moderate  means,  and  the 
organization  becomes  powerful  only  through  the  aggrega- 
tion of  small  sums  representing  shares.  The  office  of  this 
institution  is  to  take  this  capital  and  wield  it  through 
chosen  executive  agents  of  unusual  qualification,  and  thus 


THE  MODERN  CORPORATION.  241 

increase  its  power  and  utility.  If  rightly  handled,  it  is 
like  a  labor-saving  machine  to  the  shareholder.  It  is  not 
merely  a  concentrated  agency,  to  hire  labor  and  sell  pro- 
duct, but  its  office  is  to  take  crude  and  inexpert  labor  and 
capital,  unitize  them,  and  through  skilful  processes  trans- 
mute them  into  new  forms  which,  because  more  useful  to 
society,  will  bring  pecuniary  reward.  The  corporation  is 
not  merely  a  great  machine  to  be  operated,  but  an  economic, 
social,  and  moral  force,  so  virile  that  it  may  advance  as  a 
pioneer  far  beyond  the  confines  attainable  to  individual 
prospectors. 

An  English  lawyer  logically  demonstrated  that  corpo- 
rations "have  no  soul."  He  affirmed  that  none  but  God 
could  create  souls,  and  that  corporations  were  creations 
of  the  king.  This  is  often  quoted  as  an  inference  that 
they  are  naturally  hard  and  selfish.  But  the  fact  that 
they  are  soulless,  in  some  ways  gives  them  peculiar  power 
and  efficiency.  Their  impersonal  quality  frees  them  from 
individual  weakness  and  idiosyncrasy.  They  are  giants, 
reduced  to  order  and  put  within  boundaries  through  the 
sovereign  power  of  the  State. 

The  distinguishing  corporate  characteristic  is  perpe- 
tuity. The  right  of  succession  conferred  by  the  State 
gives  it  great  advantages  over  the  individual.  His  opera- 
tions close  with  his  life,  but  this  complex  theoretical  per- 
sonage lives  on.  Officers  and  stockholders  may  die,  or  go 
into  bankruptcy,  but  its  activities  are  unceasing.  How- 
ever, there  are  three  possible  ways  in  which  it  may  come 
to  an  end  ;  viz.,  by  the  death  of  all  its  members  without 
successors,  which  is  extremely  improbable ;  by  a  voluntary 
surrender  of  its  charter  ;  or  by  the  repeal  of  its  charter  by 
the  State.  The  latter,  however,  never  takes  place,  except 
it  be  so  provided  in  the  charter,  or  in  consequence  of  its 
violation,  that  being  regarded  as  a  contract  between  the 
State    and    the   corporators.     The   corporation   may  make 


242        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

its  own  laws,  provided  they  do  not  conflict  with  the  gen- 
eral laws  of  the  State.  Except  in  the  line  of  its  own 
specific  purpose,  it  is  not  as  free  as  the  individual.  It 
must  follow  the  prescribed  path,  while  he  may  make  any 
contract  which  is  not  actually  unlawful  in  its  nature.  Its 
creator  marks  out  its  limits,  and  gives  it  a  name  under 
which  persons  act  in  specified  ways  for  definite  purposes. 

It  would  be  impossible  for  individuals  to  carry  on  great 
modern  enterprises ;  but  even  if  they  had  the  ability,  every 
thing  would  have  to  be  closed  up,  or  disposed  of,  with  the 
settlement  of  their  estates.  The  super-personal  power  of 
corporate  enterprise  alone  renders  higher  social  evolution 
possible. 

Under  our  system  of  government,  each  State  constitutes 
the  sovereign  power  which  creates  and  regulates  the  cor- 
porations which  are  located  within  its  limits.  There  is, 
therefore,  no  uniformity  in  the  powers,  privileges,  and 
limitations  contained  in  the  charters  of  American  corpora- 
tions. In  some  States  the  provisions  for  corporate  estab- 
lishment are  general  and  simple,  so  that  with  little 
formality  the  necessary  papers  can  be  placed  on  file  with 
the  proper  authorities  and  a  new  corporation  brought  into 
existence.  The  provisions  bearing  upon  the  relations  of 
the  corporation  with  its  shareholders  are  also  very  unlike. 
Some  require  a  fiill  contribution  of  the  par  value  of  the 
shares,  while  others  leave  all  such  details  without  restric- 
tion. On  account  of  these  differences,  corporations  are 
often  formed  and  chartered  in  States  other  than  those 
where  their  business  operations  are  mainly  located.  For 
railroads  and  other  quasi  public  corporations,  special  legis- 
lative acts  are  required.  The  general  tendency,  however, 
is  to  substitute  general  laws  and  regulations  for  special 
acts,  in  the  creation  of  corporations.  Any  peculiar  or 
imusual  chartered  privileges  have  an  exclusive  and  monop- 
olistic aspect  which  is  unpopular,  and  not  in  accord  with 


THE  MODERN  CORPOEATION.  243 

democratic  principles.  Special  legislation  is  rapidly  giving 
way  to  that  whicli  is  general,  thereby  placing  the  whole 
community  on  an  equal  footing. 

The  rapid  increase  in  the  number  and  variety  of  corpo- 
rations, and  their  growing  power,  are  suspiciously  regarded 
by  public  sentiment.  Here  as  elsewhere,  it  is  easy  to  con- 
found abuses  with  the  system,  and  to  overlook  great  use- 
fulness and  adaptation.  We  vastly  overrate  their  power 
for  harm,  even  if  they  have  harmful  motives.  Their  pros- 
perity, as  well  as  that  of  their  corporators,  is  bound  up  in 
that  of  the  body  politic.  As  producers  they  are  entirely 
dependent  on  demand,  and  can  oblige  no  one  to  purchase 
their  products,  unless  he  may  think  it  for  his  interest.  As 
purchasers  of  labor  or  material,  no  one  is  obliged  to  sell  to 
them  except  of  his  own  free  will.  Even  if  the  managing 
power  of  a  corporation  had  savage  instincts,  it  is  securely 
caged  in  its  outside  relations  by  the  natural  principles  of 
supply,  demand,  and  competition,  which  are  stronger  than 
iron  bars.  While  the  public  is  therefore  secure,  stockhold- 
ers are  not  always  so  well  protected.  They  are  behind  the 
bars,  and  sometimes  need  to  be  saved  from  their  "  friends." 

The  popular  impression  of  a  corporation  is  that  it  is 
almost  necessarily  rich  and  selfish.  But  its  peculiar  func- 
tion is  not  well  understood.  It  is  an  economic  industrial 
force,  created  for  a  specific  purpose.  Its  executive  man- 
agement is  a  moral  trusteeship  for  the  carrying  out  of 
particular  enterprise.  It  is  not  at  liberty  to  divert  the 
property  of  the  stockholder  into  any  channel  outside  of 
the  special  objects  of  the  organization.  Individuals  should 
be  benevolent,  but  it  is  a  delicate  ethical  question  whether 
or  not  corporate  managers  should  be  liberal  with  money 
which  is  not  their  own.  It  is  entrusted  to  them  for  a 
specific  purpose  only.  Benevolence  is  a  function  belonging 
to  individuals,  but  not  to  a  corporation,  unless  such  an  ex- 
ercise is  included  in  its  charter.     But  every  corporation 


244         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

should  be  humane,  liberal,  and  moral,  within  the  province 
of  its  recognized  business.  Individuals  who  compose  a 
corporation,  in  their  private  capacity,  should  be  altruistic 
toward  all  humanity ;  but  the  organization,  as  a  unit,  has 
had  its  limited  scope  definitely  marked  out  at  the  time  of 
its  creation. 

As  a  rule,  the  richest  and  most  extensive  corporations 
are  composed  of  a  large  number  of  small  stockholders. 
This  is  the  case  to  an  unappreciated  extent  with  railroads, 
savings  banks,  and  loan  associations.  Even  the  national 
banks,  which  in  the  eyes  of  many  represent  a  small  co- 
terie of  the  rich,  are  found  upon  examination  to  be  ag- 
gregations of  capital  generally  owned  in  small  amounts 
and  widely  scattered.  Unfounded  prejudice  against  legiti- 
mate wealth  is  often  carried  so  far  that  it  almost  seems  as 
though  honest  thrift  and  industry  were  something  not  very 
creditable.  But  the  savings  bank  is  an  index,  not  only 
of  thrift,  but  of  education,  refinement,  and  philanthropy. 

The  existing  prejudice  against  corporations  is  not  due 
to  any  inherent  fault  or  lack  of  usefulness  in  the  principle, 
but  to  the  prevailing  unfaithfulness  among  corporate  man- 
agers. It  lies  in  personal  character — or  rather  the  lack 
of  it  —  and  not  in  the  system. 

The  primary  movement  in  the  establishment  of  new 
forces  in  material  civilization  is  in  the  direction  of  tempo- 
rary monopoly.  But  this  is  only  a  process.  Its  working 
is  seen  in  the  patent  laws  of  all  civilized  nations.  The 
secondary  and  permanent  tendency  is  diffusive.  There 
must  be  a  gathered  energy  in  the  beginning  to  project 
new  agencies  into  wide  distribution.  Meritorious  inven- 
tions often  fail  to  come  into  broad  application  because  of 
the  weakness  of  the  centralized  agency  at  their  fountain 
head. 


THE  ABUSES  OF  CORPORATE 
MANAGEMENT. 


"  Justice,  sir,  is  the  great  interest  of  men  on  earth.''^ 

Webstee. 

"  All  power  is  a  trust,  and  we  are  accountable  for  its  exercise.'''' 

DiSUAELI. 

"  Private  credit  is  wealth  ;  public  honor  is  security.'''' 

Letters  of  Junius. 

"  No  legacy  is  so  rich  as  honesty.'''' 

All's  Well  that  ends  Well. 

*'  An  honest  man''s  the  noblest  work  of  GodJ'"' 

Pope. 

"  Render  therefore  to  all  their  dues.''^ 

Romans  xiii.  7. 

"  Confidence  is  a  plant  of  slow  grovjth  in  an  aged  bosom.'''' 

Pitt. 

{The  Stockholder^ s  Soliloquy.) 
"  Though  this  may  be  play  to  you, 
Tis  death  to  ms." 

Fable. 


XXI. 

THE  ABUSES   OF  COEPORATE  MANAGEMENT. 

DiKECTORiAL  unscrupulousiiess  is  a  dark  cloud  in  the 
social  and  moral  horizon.  It  blunts  public  honesty,  drags 
down  pure  ideals,  chills  wholesome  enterprise,  and  fur- 
nishes a  plausible  excuse  for  socialistic  and  anarchic  agita- 
tion. But  it  is  no  more  a  part  of  the  normal  corporation 
than  are  the  barnacles  a  part  of  a  graceful  yacht.  It  is  not 
an  inherent  part  of  the  "  social  system,"  but  a  deadly  upas, 
whose  roots,  trunk,  and  branches  are  all  in  blighted  personal 
character. 

It  is  often  asked:  Why  is  business  so  dull,  good  stocks 
so  low,  and  money  piled  up  in  banks,  instead  of  filling  the 
channels  of  business  ?  People  scan  the  financial  horizon, 
and  assign  almost  every  other  reason  for  these  conditions 
than  the  true  one.  Various  theories  place  the  fault  in  the 
tariff,  the  administration,  too  much  silver,  too  little  silver, 
surplus  legislation,  or  needed  legislation.  But  the  true 
reason  is  too  little  honesty.  General  confidence  in  the  integ- 
rity of  the  average  manager  and  director  has  been  badly 
shaken.  The  "lambs  have  been  shorn,"  and  "the  goose 
killed  that  laid  the  golden  egg,"  and  others  are  not  forth- 
coming. 

The  directorial  board  of  a  corporation,  who  are  theoreti- 
cally its  servants  and  guardians,  become  its  dictators  and 
consumers.  But  the  demoralization  is  general,  rather  than 
special ;  and  it  is  to  be  feared  tliat  many  who  are  not  now 
officials  would,  under  similar  circumstances,  do  much  the 
same.  The  manager  is  only  a  sort  of  exponent  of  the 
prevailing  ethical  standard. 

247 


248        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

Directorial  abuses  are  not  only  common,  but  subtle, 
plausible,  and  insinuating,  so  as  to  obscure  and  almost 
eclipse  axiomatic  moral  principles,  which  are  older  than 
the  Decalogue.  The  public  conscience  is  so  accustomed  to 
directorial  manipulation,  and  skilful  and  prolific  ingenuity 
on  the  part  of  officials,  more  especially  those  of  the  average 
railroad,  that  as  a  matter  of  course  they  are  almost  ex- 
pected. To  be  on  the  "  inside  "  is  often  as  good  as  a  fortune 
assured.  Unscrupulous  management  is  regarded  only  as 
"  shrewd  financiering,"  and  even  as  "  brilliant,"  so  long 
as  it  escapes  technical  and  legal  cognizance  and  punishment. 
Instead  of  earnest  condemnation  from  the  public  press,  it 
often  calls  out  criticism  only  of  a  flippant  or  facetious 
character.  Its  direct  consequences  may  be  seen  in  great 
congested,  unearned  fortunes,  in  a  lax  public  conscience,  in 
the  universal  distrust  with  which  the  world  regards  the 
average  American  railway  management,  and  in  the  trans- 
formation of  a  legitimate  stock-investment  business  into 
one  of  a  gambling  character.  It  furnishes  the  text  and 
vantage-ground  of  every  anarchist,  socialist,  and  would-be 
destroyer  of  our  present  social  order ;  and  so  far  as  legiti- 
mate investment  is  concerned,  it  has  put  it  in  close  limita- 
tions. It  seems  strange  that  both  legislation  and  public 
opinion  have  so  lightly  regarded  these  great  commercial 
evils,  and,  while  perfectly  aware  of  their  magnitude,  have 
taken  no  earnest  measures  for  their  abatement.  The  direct 
financial  sufferers  are  the  hundreds  of  thousands  of  share- 
holders ^  and  owners  of  other  securities,  who  have  furnished 
perhaps  fifteen  billions  of  dollars  which  have  created  the 
great  arteries  of  American  commerce,  and  without  which 
the  material  resources  of  the  nation  would  be  but  infantile 
in  comparison  with  the  present  reality.  The  great  majority 
of  shareholders   have   no   practical  way  of  making  their 

1  Their  numbers  range  from  a  few  hundred  in  some  lines  up  to  fifteen 
or  fn'enty  thousand  each  in  a  few  of  the  great  "Western  systems. 


THE  ABUSES   OF   CORPORATE  IklANAGEMENT.      249 

influence  felt  in  the  conduct  of  the  business  of  their  several 
corporations,  and  are  largely  the  victims  of  a  false  system 
which  is  strongly  intrenched  and  of  rapid  growth. 

With  all  due  recognition  of  numerous  and  honorable  ex- 
ceptions in  the  application  of  these  strictures,  the  fact 
remains  that  the  average  railway  management  is  autocratic, 
irresponsible,  and  often  definitely  dishonest  in  its  relations 
towards  its  shareholders.  Investors  are  made  to  bleed  at 
every  pore,  while  their  pseudo  trustees,  by  means  of  earlier 
and  superior  information,  fatten  equally  well  on  corporate 
adversity  or  prosperity.  Between  the  triple  combination 
of  official  dishonesty,  the  shackles  of  the  interstate  com- 
merce law,  and  hostile  State  legislation,  the  interests  of 
the  shareholder  are  ground  to  powder. 

Let  us  definitely  note  some  of  the  ways  in  which  the 
investor  suffers  from  directorial  chicanery. 

First.  By  manipulation  in  the  stock  market,  through 
combination  or  conspiracy  among  the  managers,  to  the  un- 
fair disadvantage  of  the  other  proprietors. 

Second.  By  withholding  regular  reports,  statements, 
and  information,  for  personal  advantage,  the  injustice  of 
which  the  common  law  does  not  take  cognizance  of. 

Third.  By  complicated  systems  of  book-keeping,  which, 
though  not  technically  fraudulent,  are  misleading  and 
deceptive. 

Fourth.  By  personal  interest  in  other  railways  or  cor- 
porations, with  which  consolidations,  the  absorption  of 
branch  lines,  leases,  or  special  running  arrangements,  are 
made,  to  the  detriment  of  common  stockholders. 

Fifth.  By  official  interest  in  railway  "■  construction 
companies  "  and  fast  freight  lines,  for  personal  advantage, 
to  the  disadvantage  of  the  corporation. 

Sixth.  By  commissions  and  profits  on,  or  an  interest 
in,  purchases  or  sales  of  material  for  the  company. 

If  the  early  and  peculiar  knowledge  incidental  to  the 


250         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

position  of  the  management  be  used  as  a  basis  for  manipula- 
tion, to  the  detriment  of  the  stockholder,  it  is  as  truly  steal- 
ing, from  a  moral  point  of  view,  as  it  woidd  be  in  case  a 
portion  of  the  rolling  stock  or  track  were  purloined.  Im- 
material possessions  are  as  intrinsic,  and  as  truly  property, 
as  are  those  assets  which  can  be  seen  and  handled.  The 
public  conscience  should  be  educated  up  to  the  point  of 
calling  these  actions  by  their  right  names ;  and  the  lack  of 
such  explicitness  has  prompted  proceedings,  many  of  which 
are  criminal  in  character,  and  which  should  be  so  classed 
in  law  and  fact. 

After  this  catalogue  of  managerial  short-comings,  some 
of  our  well-meaning  nationalistic  enthusiasts  will  doubtless 
respond :  "  Yes,  the  abuses  are  heinous  and  therefore  the 
Government  should  acquire  and  operate  these  corporate 
properties  —  especially  the  railroads."  Who  is  "  the  Gov- 
ernment "  practically  ?  The  politicians  of  the  dominant 
party.  Nationalization  would  add  to  the  present  array  of 
evils  the  still  more  formidable  corruption  which  inheres  in 
political  partisanship  and  "  bossism."  It  might  result  in 
fastening  on  to  the  great  arteries  of  commerce  an  enlarged 
national  Tammany,  the  probable  results  of  which  may  be 
faintly  imagined. 

But  though  a  great  and  general  reform  in  the  public 
morale  is  the  important  thing  needed,  it  may  be  possible  for 
legislation,  applied  from  without,  to  administer  certain  anti- 
dotes that  are  well  worth  a  trial.  Some  of  them  may  be 
outlined  as  follows :  — 

First.  The  compulsory  issuing  of  monthly  reports  in  a 
uniform  manner,  and  after  a  prescribed  formula,  the  cor- 
rectness of  which  should  be  affirmed  by  the  oath  of  one  or 
more  directors,  adding  thereto  such  explanatory  matter  as 
the  management  might  deem  necessary. 

Second.  A  periodical  audit  by  outside  governmental 
examiners  or  professional  accountants,  duly  qualified  and 


THE  ABUSES   OF   CORPORATE  MANAGEMENT.      251 

sworn  for  this  special  service,  on  some  plan  similar  to  that 
used  in  the  case  of  the  national  banks. 

Third.  Construe  as  bribery  the  receiving  of  any  com- 
missions or  presents  by  any  auditor,  purchasing  agent,  or 
ofl&cial,  which  are  given  because  of  his  official  position. 

Fourth.  That  it  shall  be  illegal,  with  heavy  penalties, 
for  any  corporate  official  or  manager  to  buy  the  stock  of  his 
company,  except  for  actual  investment ;  nor  shall  he  sell 
the  same  unless  he  be  the  actual  owner  of  the  amount  sold, 
and  make  a  delivery  of  it ;  and  he  shall  neither  buy  nor 
sell  except  after  prescribed  public  notice. 

Fifth.  Require  affidavits  at  stated  intervals  from  each 
official  that  he  has  made  no  speculative  sales  or  purchases, 
indirectly,  of  the  stock  of  his  corporation,  and  that  he  has 
no  interest  in  any  siich  transactions  made  by  or  through 
any  other  persons. 

It  may  be  objected  that  the  last  two  proposed  measures 
do  not  harmonize  with  the  principles  of  laissez  faire;  but  a 
sound  political  economy  teaches  that  individual  freedom 
must  give  way  to  collective  freedom,  and  that  the  will  of 
society  is  paramount  to  personal  will.  Managers  would  be 
restricted  by  such  a  plan  only  in  a  single  direction,  which 
is  the  vital  point  to  be  guarded,  but  elsewhere  they  would 
have  perfect  liberty.  If  the  adoption  of  the  last  two  meas- 
ures were  found  impracticable,  the  single  requirement  of 
monthly  sworn  statements  would  strike  a  telling  blow  at 
the  abuses  of  official  control.  Adequate  salaries  should  be 
paid  for  all  official  services  actually  rendered,  which  would 
remove  every  plausible  excuse  on  the  part  of  the  manage- 
ment for  any  predatory  invasion  of  the  shareholders'  inter- 
ests. It  is  time  that  the  most  necessary  and  honorable 
business  of  building  and  operating  a  railroad  should  be 
otherwise  looked  upon  than  as  a  "  scheme,"  or  even  a  game 
in  which  the  management  play  with  loaded  dice. 

The  systematic  wrecking  and  reorganizing  of  railways. 


252        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

in  which  the  interests  of  the  shareholder  are  uniformly 
sacrificed,  forms,  perhaps,  the  darkest  stain  upon  American 
commercial  honor. 

Practically,  the  average  shareholder  in  a  great  railway 
corporation  has  no  influence  whatever  in  shaping  its  policy, 
even  if  he  enact  the  farce  of  voting  by  self  or  proxy  at  its 
annual  election.  Is  there,  then,  any  remedy  for  the  abuses 
which  have  been  so  harmful  to  the  interests  of  investors, 
and  which  so  seriously  menace  their  future  ?  It  seems 
probable  that  a  thoroughly  organized  working  association 
of  investors  and  stockholders  in  each  important  city  might 
prove  to  be  an  exceedingly  useful  institution.  Such  organi- 
zations, by  the  employment  of  able  committees  on  legal 
prosecution,  legislation,  economic  literature,  and  in  any 
other  needed  departments,  might  successfully  grapple  with 
abiises  against  which  the  individual  is  powerless.  While 
advancing  the  interest  of  its  own  members,  it  also  could 
greatly  aid  the  general  public  in  rooting  out  directorial 
manipulation  and  mismanagement,  and  in  an  important 
degree  promote  needed  economic  legislation,  and  also  lend 
its  aid  in  securing  the  repeal  of  that  already  in  force  which 
is  harmful  and  superfluous.  The  moral  as  well  as  the 
legal  power  which  such  organizations  might  wield  is  very 
important. 

Looked  at  from  the  outside,  every  railway  or  other  busi- 
ness corporation  is  a  unit.  This  fact  is  realized  in  all  its 
external  relations,  whether  with  the  general  public,  with 
legislation,  or  in  its  commercial  transactions.  Like  the 
human  body,  though  it  has  many  members,  it  has  but  one 
will,  one  head,  one  voice.  But  though  a  unit  as  viewed 
from  without,  its  internal  relations  are  many  and  complex. 
The  usurpations  of  the  management,  who  entirely  control 
and  regulate  its  outside  relations,  often  entirely  defeat  the 
course  intended  from  within.  Stockholders  should  there- 
fore be  more  vigilant  in  guarding    their  own  interests. 


THE  ABUSES   OF   CORPORATE  MANAGEMENT.        253 

Through  combined  effort  they  can  make  their  influence 
felt,  instead  of  passively  perpetuating  mismanagement, 
through  the  use  of  the  conventional  corporate  machinery. 
Any  well  ordered  efforts  in  this  direction  would  not  only 
conserve  interests  that  were  directly  represented,  but  also 
have  a  wholesome  moral  influence  in  a  broader  scope. 


THE   EVOLUTION   OF   THE  RAILROAD. 


'^  No  pent-up  Utica  contracts  your  powers, 
But  the  whole  boundless  continent  is  yours.^' 

SEWAIi. 

"  Facility  of  communication  in  social,  commercial,  and  political 
intercourse  is  a  distinguishing  index  of  civilization.'''' 

"  Let  observation,  rvith  extensive  view, 
Survey  mankind  from  China  to  Peru.'''' 

Samuel  Johnson. 


XXII. 
THE  EVOLUTION   OF  THE   RAILROAD. 

Pbogbess  toward  higher  civilization  and  social  develop- 
ment is  hastened  by  the  growing  perfection  of  the  means 
of  communication  and  transportation.  The  body  politic, 
like  the  human  organism,  must  have  its  vital  currents ;  and 
their  circulatory  processes  are  carried  forward  by  means  of 
arteries  and  veins.  The  roads  of  a  country  provide  for  its 
pulsations  of  living  activity,  and  their  superiority  is  an 
index  of  its  progress,  not  only  in  commerce,  but  in  art, 
science,  and  literature.  Barbarism  is  universally  charac- 
terized by  the  lack  of  any  adequate  facilities  for  travel  and 
commercial  intercourse. 

It  is  therefore  in  accord  with  Natural  Law  that  the 
presence  or  absence  of  adequate  roads  indicates  a  dividing 
line  between  two  diverse  conditions  of  society.  When  the 
Roman  Empire  was  at  the  height  of  its  power  and  gran- 
deur, it  was  distinguished  for  its  roads,  and  all  led  to 
Rome.  Portions  of  the  famous  Appian  Way,  built  three 
hundred  years  before  the  Christian  era,  still  remain.  It  was 
over  three  hundred  miles  in  length,  spacious,  and  smoothly 
paved  with  hewn  stone  blocks,  laid  in  cement.  Numerous 
other  roads,  equal  in  character  to  our  best  city  streets, 
diverged  from  Rome  for  thousands  of  miles,  to  the  most 
distant  parts  of  the  empire.  Mountains  of  rock  were  tun- 
nelled, and  rivers  and  ravines  were  spanned  by  massive 
stone  bridges,  over  which  her  invincible  legions  could  march 
Avithout  interruption,  while  she  was  mistress  of  the  world. 
These  great  works  were  so  substantial  that  fragments  of 

257 


258        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

them  still  remain,  notwithstanding  the  disintegrating  influ- 
ences of  the  frosts  and  floods  of  twenty  centuries.  In 
contrast,  the  feudal  age  of  comparative  barbarism  was 
destitute  of  highways,  and  had  no  facilities  for  communica- 
tion. The  baron  of  old  England,  or  on  the  Khine,  who 
ruled  the  adjacent  region,  perched  his  castle  on  inaccessible 
heights.  He  built  no  roads  or  bridges,  for  communication 
was  not  desired.  Wheeled  vehicles,  except  a  few  of  the 
rudest  sort,  were  unknown,  and  all  travelling  was  done  on 
foot  or  on  horseback,  through  fields,  forests,  and  streams. 
Then  there  could  be  no  social  or  mental  progress,  no  com- 
merce, and  no  reciprocal  activity.  Industrial  development 
was  impossible  for  lack  of  channels.  By  ISTatural  Law,  fric- 
tion produces  heat;  so  inter-communication  excites  mental 
activity,  and  stimulates  art,  science,  and  invention.  Nothing 
has  so  contributed  to  dispel  the  lethargy  of  ages,  and  to 
quicken  the  current  of  investigation,  as  the  utilization  of 
steam  and  electricity. 

Even  turnpikes  were  not  constructed  in  England  until 
the  early  part  of  the  18th  century,  and  the  first  English 
canal  was  dug  as  late  as  1760.  The  yearly  movement  of 
merchandise  on  all  the  through  land  routes  of  the  world  a 
century  ago,  would  not  equal  that  of  one  of  our  great 
trunk  lines  of  the  present  time.  Long-distance  transporta- 
tion by  land,  except  for  the  most  concentrated  and  valuable 
products,  is  entirely  a  thing  of  the  present.  We  are  more 
inclined  to  look  at  the  present  and  the  future,  but  a  brief 
retrospect  is  often  instructive.  Not  till  1833  was  there  a 
daily  mail  between  London  and  Paris.  The  English  postage 
on  foreign  letters  was  from  twenty-eight  to  eighty-four 
cents,  besides  the  foreign  rates  and  ship  charges  to  be  paid 
by  the  receiver.  On  inland  letters,  at  the  same  time,  the 
postage  was  twenty  cents  per  sheet.  In  our  own  country, 
up  to  1845,  inland  rates  were  from  six  to  twenty-five  cents, 
according  to  distance.     In  1851,  a  reduction  was  made  to 


THE   EVOLUTION   OF  THE  RAILROAD.  259 

a  uniform  rate  of  three  cents  per  half  ounce.  Not  only 
modern  civilization  depends  upon  easy  and  rapid  communi- 
cation, but  even  free  government,  except  on  a  small  scale, 
could  hardly  exist  without  it.  Union  of  sentiment  is  in- 
dispensable to  its  continuance,  and  modern  facilities  of 
intercourse  alone  can  secure  it.  The  people  of  a  vast  terri- 
tory, like  our  own,  are  more  thoroughly  assimilated  and 
unified  than  was  possible  a  century  ago  with  those  of  a 
single  State.  The  far  away  provincial  towns  feel  the  met- 
ropolitan heart-throbs. 

We  soon  become  accustomed  to  modern  facilities,  accept 
them  as  a  matter  of  course,  and  regard  their  usefulness  with 
indifference.  Not  only  so,  but  we  become  exacting  and 
almost  unreasonable  in  our  demands  upon  them.  The 
prairie  farmer,  who  perhaps  formerly  used  his  corn  as  fuel 
for  lack  of  transportation  and  a  market,  soon  forgets  his  ex- 
perience, and  is  dissatisfied  with  his  present  advantages. 
The  railroad,  which  has  doubled  the  value  of  his  farm  and 
products,  and  for  the  completion  of  which  he  ardently 
longed,  soon  becomes  to  him  an  offensive  monopoly. 

A  hundred  years  ago  it  cost  three  dollars  to  transport  a 
barrel  of  flour  a  hundred  miles  ;  and  salt  which  was  a  cent 
a  pound  at  a  seaport,  often  cost  six  cents  at  an  inland 
market. 

A  part  of  the  price  of  all  products  is  made  up  of  their 
cost  of  carriage  from  the  place  where  they  were  grown  or 
manufactured.  Often  a  sliglit  decrease  in  transportation 
charges  creates  new  business,  and  enlarges  that  before 
established  a  hundred-fold,  rendering  necessary  a  large  in- 
crease in  the  labor  required. 

When  railroads  were  in  their  infancy,  it  was  assumed 
that  they  would  be  public  highways,  and  that  every  shipper 
would  use  his  own  cars,  or  trains,  paying  the  company  a  toll 
for  the  use  of  their  track.  As  business  increased,  it  was 
soon  found  that  such  a  plan  was   utterly  impracticable. 


260         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

The  present  clamor  for  restrictive  legislation  is  perhaps  a 
remnant  of  this  antiquated  idea,  and  much  of  that  proposed 
is  no  more  practical.  A  railroad  is  not  merely  an  improved 
public  highway,  but  a  great  and  complicated  transporting 
machine,  requiring  the  highest  order  of  ability  for  its  suc- 
cessful operation.  We  are  mainly  considering  public  in- 
terests as  related  to  railroads,  but  will  briefly  look  at  those 
of  investors.  "We  have  seen  that  it  is  natural  that,  as  the 
interval  between  the  investor  and  investment  increases,  the 
dangers  from  waste  and  mismanagement  increase  in  like 
proportion.  On  this  point  Mr.  John  B.  Jervis,  in  his  able 
work  on  railway  property,  says :  "  This  kind  of  investment 
is  not  well  suited  in  general  to  small  proprietors  so  situated 
that  they  can  exercise  no  control,  and  who  are  exposed  to 
the  danger  of  having  their  property  managed  by  unfaithful 
men,  who  seek  to  make  the  institution  subservient  to  their 
interest,  rather  than  to  that  of  the  proprietors." 

The  remarkable  movement  towards  consolidation,  which 
has  taken  place  during  the  last  thirty  years,  deserves  brief 
attention.  Popular  sentiment  is  distrustful  of  growing  ag- 
gregations of  capital  and  power,  and  some  look  upon  them 
as  an  evil,  or  even  as  a  menace  to  our  institutions.  The 
fact  that  consolidation  is  not  only  caused  by  Natural  Law, 
but  is  also  ruled  by  it,  is  entirely  overlooked.  If  the  process 
went  on,  until  there  were  only  one  gigantic  system  in  the 
whole  country,  it  would  still  be  subservient  to  the  imperial 
edicts  of  supply  and  demand.  If  it  made  an  effort  to  im- 
pose artificial  rates,  or  those  that  were  even  a  little  above 
the  normal,  then  in  a  greater  proportion  demand  would  fall 
off  and  business  and  profits  decrease.  If  a  normal  rate 
were  restored,  demand  for  service  would  be  so  much  en- 
hanced that  financial  gain  would  result.  Supply  and  de- 
mand perform  their  office  as  quickly  and  surely  as  does  the 
"  governor  "  of  a  steam  enfrine. 

The  earliest  railroad  charters  were  for  short  independent 


THE  EVOLUTION   OF   THE  RAILROAD.  261 

lines.  In  England  the  earlier  railways  averaged  only  fifteen 
miles  in  length.  In  1847,  five  thousand  miles  were  owned 
by  several  hundred  different  companies.  In  1872,  thirteen 
thousand  miles  were  nearly  all  owned  by  twelve  companies. 
This  tendency  has  been  nearly  as  marked  in  this  country. 
As  a  single  instance,  that  part  of  the  New  York  Central 
line  between  the  Hudson  River  and  Lake  Erie,  originally 
belonged  to  sixteen  different  companies.  During  the  last 
few  years  the  development  has  been,  not  merely  into  longer 
lines,  but  into  great  systems.  Many  of  these  now  embrace 
from  two  thousand  to  six  thousand  miles  of  road,  and  form 
arteries  through  which  commercial  currents  flow,  giving  life 
to  great  domains,  each  larger  than  some  of  the  entire  king- 
doms of  the  Old  "World.  What  is  the  cause  of  this  general 
and  rapid  consolidation  ?  what  are  its  tendencies  ?  and  what 
will  be  the  results  ?  It  has  taken  place  not  by  chance,  nor 
because  of  any  local  or  temporary  reasons,  but  in  obedience 
to  the  pressure  and  behests  of  unvarying  ISTatural  Law. 
The  natural  demand  for  decreasing  rates  of  transportation, 
together  with  competition,  have  made  it  indispensable.  It 
is  a  case  of  the  "  survival  of  the  fittest,"  and  of  a  develop- 
ment of  the  lower  into  the  higher.  In  no  other  way  could 
such  remarkable  reductions  in  rates  and  vast  increase  of 
business  have  been  realized.  Under  no  other  plan  would 
such  a  degree  of  perfection  in  appliances  and  rapidity  of 
service  be  possible.  Modern  convenience,  comfort,  and  luxury 
are  the  results  of  the  law  of  combination  and  consolidation. 
Contrast  the  present  passenger  service  with  that  of  forty 
years  ago.  A  passenger  leaving  New  York  for  Chicago  not 
only  paid  a  much  higher  fare,  but  had  to  change  at  the  end 
of  each  separate  short  line,  and  was  as  often  compelled  to 
stand  in  line  to  get  baggage  rechecked  and  reloaded,  subject 
to  frequent  lack  of  connection,  long  hours  of  waiting,  and 
other  numerous  discomforts.  One  consolidated  system  of  a 
thousand  miles  in  length  can  render  to  the  public  a  service 


262        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

which  is  immeasurably  superior  in  luxury,  cheapness,  speed, 
and  safety,  to  tliat  which  would  be  possible  with  any  half- 
dozen  distinct  corporations. 

The  special  and  unprecedented  national  legislation  known 
as  the  Interstate  Commerce  Law  has  now  been  in  force  for 
several  years ;  and,  on  the  whole,  its  working  seems  to  have 
been  detrimental  to  the  owners  of  railroad  property  with 
little  compensating  advantage  to  the  general  public.  This 
law  is  based  upon  that  clause  in  the  Constitution  which  in- 
cludes, among  the  duties  of  Congress,  the  regulation  of 
commerce  between  the  States.  The  plain  intention  of  the 
iramers  of  the  Constitution  was  to  forever  prevent,  by  any 
State,  the  erection  of  any  customs  tariffs,  so  that  State  lines 
should  be  no  obstruction  to  the  free  currents  of  commerce. 
The  idea  of  regulating  the  market  price  for  carrying  freight 
or  passengers  probably  never  entered  their  minds.  The 
basis  for  a  national  legislative  interference  with  the  legiti- 
mate, free,  competitive  business  of  common  carriers,  there- 
fore seems  strained  and  unnatural.  As  the  courts  have 
sanctioned  such  regulation,  however,  their  decision  must  be 
accepted.  It  is  undoubtedly  true  that  the  peculiar  public 
sentiment  which  inspired  this  law  was  mainly  prompted  by 
directorial  abuses ;  but  the  aim  was  wide  of  the  mark,  for 
when  the  charge  was  fired,  the  game  that  came  down  was 
the  shareholder. 

The  object  of  government  and  legislation  is  not  to  de- 
stroy value,  but  to  protect  and  conserve  it.  The  Interstate 
law,  through  the  long  and  short  haul  clause,  and  the  pro- 
hibition of  pooling,  accomplishes  the  former.  The  right  to 
arbitrarily  regulate  the  rates  for  freight  or  passenger  ser- 
vice, and  thus  place  not  only  the  earnings  but  the  absolute 
capital  —  which  derives  its  entire  value  from  expected 
earnings  —  at  the  mercy  of  a  possible  unintelligent  majority 
of  Congress,  even  through  a  political  commission,  is  the 
most  radical  and  questionable  legislative  experiment  of  our 


THE   EVOLUTION   OF   THE   RAILROAD.  263 

national  history.  It  is  an  assumption  of  legal  authority 
which  lacks  a  proper  moral  basis.  The  stiff  unscientific 
hand  of  legislation  undertakes  to  regulate  prices  which 
inherently  have  in  them  the  elements  of  self-regulation. 
Objection  to  this  will  be  made  on  the  ground  that  railways 
are  g-wasi-public  institutions,  and  that  by  their  charters 
they  have  been  granted  the  right  of  eminent  domain ;  all  of 
which  is  true,  but  the  sole  reason  for  granting  that  right 
was  the  public  convenience,  and  the  shareholder  paid  full 
value  for  every  square  foot  of  ground  taken  or  damaged. 

Two  ever-present  natural  principles  regulate  the  price  of 
railway  service,  as  of  every  other  salable  commodity :  (1) 
direct  competition,  and  (2)  the  invariable  fact  that  demand 
falls  off  the  moment  that  prices  are  placed  above  the  normal 
point.  The  latter  principle,  even  in  the  entire  absence  of 
the  former,  hedges  in.  the  strongest  corporation.  The 
greatest  profit  in  the  long  run  is  always  realized  at  fair 
rather  than  at  exorbitant  rates,  popular  opinion  to  the  con- 
trary notwithstanding. 

As  a  proof,  witness  the  steady  decline  in  actual  rates  for 
railway  service,  as  they  kept  pace  with  the  normal  —  or 
those  prices  for  which,  owing  to  continually  improving 
appliances,  it  could  be  rendered  —  before  there  was  any 
legislation  on  the  subject.  A  reduction  of  ten  per  cent  in 
rates  often  brings  an  increase  of  twenty-five  or  even  fifty 
per  cent  in  business. 

Govermental  regulation  sounds  well ;  but  the  real,  not 
the  ideal  government,  may  consist  of  a  bare  majority  of 
unexpert  and  unconscientious  politicians  who  happen  to 
compose  a  given  Congress.  The  material  and  financial  con- 
ditions of  no  two  of  the  hundreds  of  American  railways  are 
exactly  alike ;  and  while  the  natural  and  elastic  law  of  sup- 
ply and  demand  can  adjust  itself  to  them  all,  it  is  impossible 
for  legislative  law  to  accomplish  this,  as  it  has  no  flexibility. 

The  Interstate  long  and  short  haul  clause  is  economi- 


264        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

cally  unscientific,  and  is  careless  of  investors'  interests, 
because  all  price  making,  except  in  the  case  of  natural 
monopolies  which  receive  special  and  exclusive  charters,  is 
beyond  the  province  of  legislation. 

Can  any  other  law  be  named  to  which  the  enforcement, 
or  permission  to  ignore,  is  left  optional  in  each  case  with  a 
board  of  extra-judicial  commissioners  ?  The  law  vests  in 
a  few  men  a  power  which  is  autocratic.  The  duty  of  the 
judiciary  is  to  interpret  and  to  enforce  law  ;  but  this  com- 
mission has  the  power  to  settle  questions  involving  millions, 
as  mere  problems  of  expediency,  in  which  no  principle  of 
right  or  wrong  is  involved.  This  Interstate  law,  if  thor- 
oughly enforced,  puts  in  jeopardy  unnumbered  millions  in 
the  actual  investments  of  American  shareholders,  and  all 
without  any  corresponding  advantage  to  shippers.  The 
shipper,  during  a  general  business  depression  caused  by  the 
shrinkage  in  railway  values,  suffers  in  common  with  all 
other  classes.  If,  however,  shippers  were  benefited,  it 
would  be  at  the  expense  of  justice.  That  section  of  the 
law  which  prohibits  pooling  naturally  forces  further  and 
greater  consolidation,  as  the  only  alternative  to  general 
bankruptcy.  Business  can  only  flourish  under  free  con- 
ditions, and  the  true  province  of  legislation  is  to  enforce 
contracts  which  have  been  voluntarily  entered  into. 

But  there  is  a  section  of  evident  utility  in  the  Interstate 
laAv,  and  that  is  the  one  which  prohibits  discrimination 
under  like  circumstances  and  conditions.  This  section,  un- 
like the  two  before  examined,  is  founded  on  a  moral  prin- 
ciple. In  the  main,  the  Interstate  law  is  the  embodied 
expression  of  an  unreasonable  prejudice  against  vested 
interests  as  represented  in  the  railway  corporations  of  the 
nation.  While  directorial  manipulation  has  greatly  intensi- 
fied and  made  ostensibly  reasonable  this  feeling,  it  is  at  the 
same  time  blind  in  its  aim,  and  unjustifiable  in  its  antago- 
nism to  the  rights  and  privileges  of  the  shareholder. 


THE  EVOLUTION   OF  THE   KAILKOAD.  265 

Abnormally  cheap  long  hauls,  under  free  conditions, 
created  a  vast  business,  which  is  destroyed  by  the  ■pro  rata 
shackles  of  the  "  long  and  short  haul  clause."  In  many 
cases,  if  the  roads  are  forbidden  to  do  it  at  a  somewhat  less 
price,  proportionately,  than  is  charged  for  shorter  hauls, 
the  business  is  lost.  A  railway  must  maintain  its  facilities 
and  fixed  charges  in  either  event,  and  therefore  cheap  long 
hauls  are  almost  so  much  clear  gain  to  the  ordinary  revenues 
of  the  road.  With  this  source  of  income  cut  off,  the  de- 
ficiency in  the  long  run  must  be  made  up  by  higher  way 
rates  than  were  necessary  before  the  freedom  of  railway 
transportation  was  taken  away.  The  Canadian  Pacific  line, 
being  free  from  the  incubus  of  artificial  restraint,  is  able  to 
command  an  immense  through  business  that  would  naturally 
be  done  by  American  lines,  which  fact  in  itself  forms  a 
striking  commentary  on  the  wisdom  of  "  long  and  short 
haid  "  repression. 

Rates  for  railway  service  in  the  United  States  when 
compared  with  those  demanded  in  Europe  are  found  to  be 
astonishingly  low,  notwithstanding  the  fact  that  employees' 
wages  are  more  than  double  the  European  average.  The 
rate  charged  per  ton  per  mile  by  the  great  trunk  lines  run- 
ning from  Chicago  to  the  Atlantic  seaboard,  as  shown  by 
statistics,  are  a  little  less  than  one  quarter  of  the  average 
rates  of  the  year  1865.  On  the  great  systems  west,  north- 
west, and  southwest  of  Chicago  the  charges  have  been  re- 
duced nearly  in  the  same  proportion. 

Restrictive  railway  legislation,  as  expressed  in  the  re- 
cent enactments  of  several  Western  States,  is  unjust  to  the 
shareholder  who  has  investments  in  the  lines  of  those  local- 
ities. Not  content  with  the  appointment  of  commissioners 
whose  duties  shall  be  to  fairly  and  carefully  conserve  the 
interests  of  both  the  public  and  the  roads,  they  construct 
ready-made  tariffs,  and,  in  some  cases,  fix  unreasonable 
maximum  prices,  and  shackle  what  little  commercial  free- 
dom has  been  spared  by  national  enactments. 


266        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

The  result  of  the  repressive  policy,  national  and  State, 
while  disastrous  to  the  dividend-earning  capacity  of  the  rail- 
ways, at  the  same  time  will  prove  morally  and  financially 
detrimental  to  the  whole  country.  "When  one  member 
suffers  all  suffer."  The  track,  road-bed,  and  rolling-stock 
of  bankrupt,  insolvent,  and  non-dividend  earning  lines 
necessarily  deteriorate,  and  the  public  service  becomes  in- 
different. Eailway  enterprise,  responsibility,  and  reliabil- 
ity will  become  impaired,  unless  the  restrictive  policy  now 
so  confidently  pursued  is  relaxed  in  an  important  degree. 

The  downward  tendency  in  rates  for  the  transportation 
of  freight,  before  noted,  which  was  steady  and  continuous 
prior  to  general  legislative  restriction,  was  in  obedience  to 
the  principles  of  supply  and  demand.  Greatly  improved 
appliances,  wielded  by  wider  and  more  thoroughly  organized 
control,  cause  the  normal  rates  for  service  to  decline,  and 
natural  principles  are  ceaselessly  pressing  actual  rates  into 
conformity.  A  normal  rate  is  that  point  above  which  de- 
mand falls  off  so  rapidly  that  profits  diminish,  and  below 
which  even  a  great  increase  of  business  would  lessen  them. 
The  problem  with  railroad  management  is,  therefore,  to 
make  the  nearest  possible  approximation  to  it.  It  varies 
with  every  road,  and  with  every  different  class  of  freight, 
and  is  a  very  complicated  question,  and  one  entirely  beyond 
the  province  of  legal  enactment.  How  much  each  particu- 
lar variety  of  freight  will  bear,  without  in  any  way  hinder- 
ing its  greatest  possible  increase  and  development,  is  a  very 
delicate  problem,  and  must  be  solved  with  great  care. 
Legislation  is  futile,  not  only  because  price-making  is  out- 
side of  its  province,  but  because  no  two  roads  are  alike  in 
business  location,  cost  of  maintenance,  character  of  traffic, 
and  many  other  conditions.  There  is  the  same  variety  in 
these  as  in  individual  enterprises.  To  a  great  extent,  rates 
fix  themselves,  and  the  power  of  the  management,  in  this 
respect,  is  greatly  overrated.     Suppose  two  or  more  compet- 


THE  EVOLUTION   OF   THE  RAILROAD.  267 

ing  lines  enter  into  a  "  cast-iron "  agreement  to  fix  rates 
that  are  somewhat  above  the  normal.  How  soon  shipments 
fall  off,  rival  routes  or  water  transportation  compete,  mar- 
kets are  disturbed,  and  speedily  the  "cast-iron"  crumbles. 
Take  the  extreme  case  of  a  road  that  has  no  possible  com- 
petition. If  even  such  a  road  attempts  to  impose  artificial 
rates,  business  is  hampered,  settlement  of  tributary  terri- 
tory discouraged,  manufactures  excluded,  and  profits  actu- 
ally diminished.  All  railroad  men  have  not  yet  become 
aware  of  these  laws,  but  they  are  rapidly  learning  them, 
and  also  that  a  broad  and  liberal  policy  is  the  most  profit- 
able. In  no  other  kind  of  business  is  the  old  familiar 
principle  of  "  large  sales  and  small  profits  "  so  applicable 
and  profitable  as  in  railroad  transportation.  The  reason 
for  this  is  that  a  large  part  of  the  expenses  consist  of 
"  fixed  charges,"  which  are  unchanged,  whether  the  traffic 
be  large  or  small.  Outside  of  these,  expenses  increase  much 
more  slowly  than  the  amount  of  business.  An  increase  of 
twenty-five  per  cent  in  general  expenses  might  be  sufficient 
for  a  business  one  hundred  per  cent  greater.  A  system  of 
five  thousand  miles  probably  would  not  cost  half  as  much 
to  operate  as  it  did  formerly  when  made  up  of  a  dozen 
distinct  corporations.  It  has  one  board  of  management, 
instead  of  many;  unity  of  purpose  in  place  of  diversity; 
single  and  thorough  organization  instead  of  inharmonious 
variety.  The  friction  of  one  large  wheel  is  much  less  than 
that  of  many  small  ones,  and  its  power  and  momentum  are 
vastly  greater.  Consolidation  should  be  considered  as  the 
greatest  labor  and  expense  saving  process  of  the  age.  Why 
should  "  reformers  "  make  such  efforts  to  excite  popular 
prejudice  against  consolidations  ?  Is  it  simply  because 
they  are  great  ?  This  is  an  age  of  grand  things,  and  of 
wonderftil  privileges  and  benefits  that  are  lightly  appre- 
ciated. A  sentimental  cry  of  "  monopoly  "  seems  to  be  all 
that  is  necessary  to  arouse  unthinking  popular  prejudice. 


268         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

The  greatest  possible  consolidation  is  hedged  in  on  every 
side  by  the  impregnable,  though  invisible,  barriers  of  Nat- 
ural Law.  "With  constantly  diminishing  rates  for  service, 
and  increasing  safety,  luxury,  and  rapidity,  it  has  not  yet 
been  explained  how  the  modern  railroad  can  be  a  ''menace," 
either  to  the  citizen  or  the  government.  Granted  that 
sharp  practice,  stock  watering,  and  many  abuses  exist,  both 
in  the  construction  and  operation  of  these  great  thorough- 
fares, the  systems  are  here,  and  are  to  remain,  and  the 
public  gets  the  advantage.  Abuses  are  incidental  to  every 
enterprise,  no  matter  how  meritorious  ;  and  this  will  be  the 
rule  as  long  as  the  element  of  selfishness  is  dominant  in 
human  nature.  Statistics  show  that  in  a  majority  of  cases 
the  original  stockholders  sunk  the  money  invested,  and  that 
the  lines  were  afterwards  and  are  still  being  operated  by 
other  and  different  proprietors,  who  purchased  the  assets  at 
a  nominal  price.  In  general,  no  other  investments  pay  so 
small  a  rate  of  interest  as  those  in  railroad  property.  Stock 
watering  is  indefensible  as  a  system ;  but  a  candid  view  will 
show  that,  in  some  cases,  it  is  only  a  "marking  up"  of 
nominal  value  to  correspond  with  what  has  taken  place  in 
actual  value.  The  enhancement  of  market  and  taxable 
values  of  terminal  facilities  and  other  kinds  of  property 
and  improvements,  is  often  considerable  in  a  series  of  years. 
For  instance :  If  the  taxable  and  the  salable  value  of  a 
road  have  increased  fifty  per  cent  in  ten  years,  is  an  in- 
crease of  the  stock  by  which  it  is  represented  in  the  same 
proportion  in  any  way  illegitimate  ?  While  this  is  the 
popular  impression,  there  seems  to  be  no  valid  reason  why 
railroad  property  should  be  exceptional  in  this  respect. 

Another  prevalent  fallacy  is  that  stock  watering  neces- 
sarily results  in  a  higher  tariff.  We  have  alread}'"  shown 
that  rates  are  made  by  causes  entirely  different.  If  the 
nominal  amount  of  the  stock  of  any  road  were  quadrupled, 
or  reduced  in  the  same  ratio,  its  material  property  still 


THE  EVOLUTION   OF  THE   RAILROAD.  269 

remains  unchanged.  Its  earning  capacities,  surroundings, 
facilities,  and  opportunities  are  neither  increased  nor  di- 
minished. The  normal  rates  at  which  business  and  profits 
are  at  the  maximum  continue  as  before. 

Wherever  there  is  dishonest  and  extravagant  manage- 
ment, the  investor  suffers ;  but  the  public  escapes,  except 
indirectly.  If  unreasonable  popular  prejudice  were  grati- 
fied to  the  extent  that,  by  unfriendly  legislation,  these 
great  corporations  could  be  crushed,  it  would  be  found 
that  scores  of  small  owners  would  be  ruined  as  often  as 
one  "millionaire."  A  large  majority  of  the  stock  and 
bonds  of  these  corporations  is  widely  scattered  among 
thousands  of  small  holders,  including  even  many  widows 
and  orphans.  Hundreds  of  millions  of  dollars  have  been 
lost  by  investors,  the  benefit  of  which  is  now  being  realized 
by  the  public.  The  commercial  importance  of  these  far- 
reaching  systems  is  even  excelled  by  their  moral  and  polit- 
ical value  in  unifying  all  our  diverse  sections  and  interests. 

The  highest  order  of  executive  talent  is  required  for 
their  successful  management.  The  chimerical  plan  that 
the  control  of  these  vast  interests  should  be  assumed  by 
the  general  government,  and  so  become  the  sport  of  poli- 
ticians, to  be  fought  over  every  four  years,  is  unworthy  of 
serious  consideration. 

Cheap  and  rapid  transportation  has  created  new  com- 
mercial centres,  and  millions  of  worthless  acres  have  not 
only  been  transformed  into  productive  farms,  but  have 
practically  been  moved  a  thousand  miles  nearer  to  market. 
The  ''  long-haul "  business  is  entirely  a  thing  of  recent 
times.  The  food  products  of  the  great  trans-Mississippi 
region  are  found  in  the  European  markets,  through  the 
practical  annihilation  of  distance  by  the  power  of  modern 
transportation. 

Art,  science,  and  literature  have  all  felt  the  quickening 
influence  of  this  movement.     Nothing  since  the  invention 


270         THE  POLITICAL  ECONOMY  OP  HUMANISM. 

of  the  printing  press  has  so  accelerated  thought  and  inves- 
tigation. With  the  aid  of  steam  and  electricity  a  nation 
becomes  a  neighborhood,  and  the  pulsations  of  news,  poli- 
tics, morals,  and  religion  are  felt  to  the  extremities.  Mind 
attains  increased  preponderance  over  matter,  the  natural 
way  of  advancement  is  opened,  and  a  new  Renaissance  is 
ushered  in.  By  Natural  Law,  physical,  mental,  and  moral 
attainment  depend  upon  man's  grasp  and  utilization  of  the 
forces  with  which  nature's  storehouse  is  overflowing. 


INDUSTRIAL   EDUCATION. 


"iet  a  man  have  accurate  perceptions.  Let  him,  if  he  have 
hands,  handle ;  if  eyes,  measure  and  discriminate ;  let  him  accept 
and  hive  every  fact  of  chemistry,  natural  history,  and  economics ;  the 
more  he  has,  the  less  is  he  willing  to  spare  any  one.  Time  is  always 
bringing  the  occasions  that  disclose  their  value.  Some  wisdom  comes 
out  of  every  natural  and  innocent  action.  The  application  of  means 
to  ends  insures  victory  and  the  so7igs  of  victory,  not  less  in  a  farm  or 
a  shop  than  in  the  tactics  of  party  or  of  war.  One  might  find  argu- 
ment for  optimism  in  the  abundant  flow  of  this  saccharine  element  of 
pleasure  in  every  suburb  and  extremity  of  the  good  world.  Let  a 
man  keep  the  law  —  any  law  —  and  his  way  will  be  strewn  with  satis- 
factions.'' Emerson. 

"  Stretched  on  the  rack  of  a  too  easy  chair. 

And  heard  thy  everlasting  yawn  confess 

The  pains  and  penalties  of  idleness.'^ 

Pope. 


XXIIL 
INDUSTKIAL   EDUCATION. 

We  are  living  in  a  peculiar  era.  While  Natural  Law  is 
unchangeable,  its  multiform  applications  are  ever  shifting. 
Old  customs,  conditions,  and  methods  of  thought  are  being 
superseded.  The  necessity  for  a  readjustment  is  nowhere 
more  marked  than  in  the  department  of  education.  Former 
methods  of  training  for  active  life  require  revision,  almost 
revolution,  in  order  that  they  may  satisfy  modern  require- 
ments. Through  changed  conditions  and  the  antagonism  of 
trade  unions,  the  apprentice  system,  once  so  universal,  is 
almost  utterly  extinct,  and  the  rising  generation  is  brought 
face  to  face  with  serious  problems. 

The  conventional  intellectual  education  of  American 
youth  is  clearly  inadequate  to  meet  present  social  and  eco- 
nomic demands.  The  regular  professions,  including  the 
law,  medicine,  and  theology  —  and  even  journalism  and 
teaching  —  are  already  overcrowded  and  constantly  becom- 
ing more  so.  American  young  men  are  too  numerous  to  find 
occupation  in  the  purely  intellectual  professions,  and  wider 
opportunities  must  be  afforded.  The  prevalent  idea,  espe- 
cially among  the  well-to-do  classes,  that  their  sons  must  em- 
ploy their  talents  within  this  select  and  limited  range,  must 
be  modified,  else  overcrowding,  inefficiency,  and  idleness 
will  be  prevalent  and  disastrous. 

Turning  to  other  and  more  available  pursuits,  we  find 
that  their  exercise  and  emoluments  are  rapidly  slipping  away 
from  native-born  youth  and  being  grasped  by  those  of  for- 
eign birth  and  training.     A  plain  statement  of  the  facts 


274         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

involves  no  racial  prejudice  or  exclusiveness,  but  only  a  rec- 
ognition of  certain  needed  readjustments  which  are  highly- 
proper  and  equitable. 

What  shall  the  average  American  boy  do?  In  what 
channel  can  his  faculties  be  trained  so  that  he  shall  be  a 
producer,  or  a  useful  member  of  society,  and  also  by  means 
of  such  economic  activity  be  able  to  gain  a  livelihood. 
Through  a  virtual  monopoly  of  all  the  principal  industrial 
trades  and  handicrafts  by  the  unions,  which  are  controlled 
and  almost  entirely  composed  of  the  foreign  born,  the  Amer- 
ican boy  has  come  to  be  almost  a  superfluity.  Opportuni- 
ties for  thoroughly  learning  any  industrial  occupation  are 
well  nigh  lost  to  him.  To  further  aggravate  the  difficulties 
of  his  position  a  prevailing  false  pride  —  shared  not  only 
by  himself  but  often  by  his  parents  —  causes  him  to  look 
askance  at  manual  employment. 

While  the  American  common  school  system,  with  its  free 
and  even  compulsory  intellectual  training,  has  been  a  matter 
of  just  gratulation,  and  while  it  has  filled  an  important 
place,  it  must  still  be  admitted  that  its  limitations  are  many 
and  important.  There  has  been  some  improvement  in  the 
general  ideal  of  what  true  education  —  or  educing  —  is ;  but 
it  still  remains  that  the  schools  of  all  grades  deal  almost 
entirely  with  objective  statements  rather  than  subjective 
mental  unfoldment.  Their  principal  aim  seems  to  be  the 
acquirement  of  a  great  volume  of  unrelated  facts  of  lim- 
ited practical  significance,  instead  of  a  development  of  the 
latent  capabilities.  The  popular  idea  of  education  is  still, 
that  it  consists  of  knowing  a  great  many  things,  whether 
or  not  these  form  any  part  of  an  all-around  equipment  for 
the  duties  of  active  life. 

Conventional  education  is  also  greatly  destitute  of  the 
ethical  element.  It  cannot  be  denied  that  each  church  and 
religious  denomination  has  been  indifferent,  if  not  averse, 
to  any  moral  system,  lest  some  theological  bias  might  creep 


INDUSTRIAL  EDUCATION.  276 

in  which  would  be  more  favorable  to  the  others  than  to 
itself.  A  regulation  curriculum  ethically  colorless  has  been 
thought  sufficient,  the  foundations  for  character  and  good 
citizenship  being  largely  neglected.  Laying  aside  all  secta- 
rian suspicion,  it  would  not  seem  difficult  to  agree  upon  a 
moral  discipline  to  which  not  even  the  smallest  minority  of 
a  civilized  community  would  make  objection.  All  will  admit 
that  animalism  and  selfishness,  which  are  so  obtrusive  in 
energetic  youthful  character,  need  to  be  guided  and  moulded 
into  higher  activities.  Without  cant  or  affectation  the 
teacher  could  inculcate  the  manly  and  womanly  virtues  of 
temperance,  honesty,  charity,  chastity,  truthfulness,  justice, 
order,  frugality,  industry,  honor,  cleanliness  of  mind  and 
body,  generosity,  gratitude,  parental  respect,  heroism,  patri- 
otism, reverence,  self-respect,  and  manners,  —  all  of  which 
every  citizen,  be  he  Protestant,  Catholic,  Jew,  or  Agnostic, 
would  heartily  approve.  Would  not  more  of  these  abun- 
dantly compensate  for  a  little  less  detail  regarding  the 
rivers  of  China,  the  mountains  of  Siberia,  or  the  campaigns 
of  Scipio  ?  Is  this  all  relevant  in  political  economy  ?  Vi- 
tally so,  for  State  education  has  for  its  purpose  the  making 
of  good  citizens.  General  social  and  economic  prosperity 
will  depend  upon  the  average  youthful  development  of  char- 
acter. 

Mere  intellectual  exercise  only  increases  a  force  which 
without  ethical  regulation  is  mischievous  and  hazardous. 
If  "  the  worship  of  the  almighty  dollar,"  and  the  dominion 
of  a  sensuous  materialism,  are  ever  to  be  made  secondary  to 
higher  aspiration,  the  germs  of  such  a  growth  must  be 
planted  in  the  fertile  soil  of  plastic  mind.  The  ideal  so- 
ciety can  only  be  composed  of  ideal  men.  The  youth  who 
is  ethically  weak  is  but  a  bundle  of  disorderly  and  unbal- 
anced propensities,  and  mere  intellectual  equipment  in- 
creases their  energy.  The  great  educational  lack  of  the 
present  time  is  in  morality  and  industry.     These  must  pre- 


276        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

vail  as  the  rule,  else  the  condition  of  the  State  itself  will 
become  precarious.  A  stream  can  rise  no  higher  than  its 
source,  and  collective  character  will  not  excel  that  of  the 
average  individual.  A  verbose  knowledge  of  objective 
facts  will  in  no  degree  compensate  for  a  lack  of  the  founda- 
tions of  good  citizenship. 

When  the  average  American  boy  "  completes  his  educa- 
tion" in  high  school,  academy,  or  college,  what  can  he  do 
for  the  world,  either  mentally  or  physically,  that  will  be  of 
service,  and  at  the  same  time  give  him  economic  support  ? 
How  can  he  stamp  the  regulation  stock  of  learning  which 
he  has  acquired  into  the  coinage  of  society  ?  If  he  be  un- 
able to  do  this  it  will  soon  decay  from  lack  of  exercise.  As 
before  noted,  only  a  minority  of  college  graduates  can  find 
places  in  the  "  professions,"  with  journalism  and  teaching 
included. 

But  what  of  the  much  larger  number  who  conclude 
their  course  of  study  with  the  common  or  high  school,  and 
then  wish  to  enter  the  active  duties  of  life  ?  They  find  the 
available  fields  of  activity  all  filled  to  repletion,  and  are 
unable  to  get  a  foot-hold.  Pride  and  lack  of  opportunity 
then  forbid  them  to  begin  to  learn  the  rudiments  of  any 
industrial  trade  or  handicraft.  Their  educational  outfit  has 
disqualified  rather  than  fitted  them  to  make  any  favorable 
start  in  a  promising  calling. 

The  demand  for  sales-people,  clerks,  office-help,  cashiers, 
and  copyists,  having  been  largely  filled  by  .girls,  and  the 
industrial  trades  by  foreign  unionists,  the  American  boy 
after  the  completion  of  his  school  course  finds  himself 
stranded.  He  has  reached  high-water  mark  and  deterio- 
ration begins.  He  cannot  utilize  the  kind  of  education  he 
has  received  ;  and  being  unable  to  find  occupation  suited  to 
his  tastes  and  abilities,  he  soon  drifts  toward  idleness  and 
inefficiency.  Even  if  of  affluent  family  he  is  in  reality 
much  more  helpless  than  his  foreign-born  associate  who  has 


INDUSTRIAL  EDUCATION.  277 

been  bred  to  manual  effort.  In  addition  to  a  false  pride 
and  a  spurious  social  standard,  the  American  boy  has  to 
contend  with  lack  of  opportunity  and  an  education  which 
is  a  misfit. 

It  is  certain  that  manual  training  and  trade  schools, 
established  and  made  efficient  by  the  State,  would  greatly 
aid  in  the  accomplishment  of  two  most  desirable  objects. 
It  would,  in  a  measure,  supply  the  missing  education  that 
has  been  lost  through  modern  conditions  and  the  decay  of 
apprenticeship,  and  also  greatly  ennoble  and  dignify  manual 
employment.  It  would  furnish  a  potent  remedial  agency 
for  the  idleness  and  degeneration  which  are  becoming  so 
serious  and  prevalent. 

Some  degree  of  manual  dexterity,  and  ability  to  use  tools 
skilfully,  is  a  valuable  resource  for  every  young  man,  even 
if  he  is  to  engage  in  a  purely  intellectual  profession. 

It  must  be  understood  that  there  is  a  wide  distinction 
between  simple  manual  training  and  the  full  acquisition  of 
special  trades.  A  practical  adjunct  of  the  former  could  be 
made  at  small  expense  to  almost  every  common  school  in 
the  land,  while  the  teaching  of  specific  trades  would  only  be 
possible  where  large  institutional  plants  or  shops  could  be 
centralized.  Manual  training,  even  With  a  few  tools,  so 
develops  industry  and  precision,  and  educates  the  hands 
and  eyes,  that  it  lays  a  general  foundation  for  all  trades, 
and  there  would  be  little  difficulty  in  making  it  a  factor  in 
every  common  school  course  of  instruction.  Even  brief 
manual  cultivation  would  be  of  uniform  profit,  whatever 
might  be  the  prospective  avocation.  It  might  be  defined 
as  athletics  made  useful,  and  at  the  same  time  reasonable 
in  its  intensity.  Its  reflex  action  upon  the  mind,  while 
lightly  appreciated,  is  of  high  importance.  It  directly  cul- 
tivates and  stimulates  care,  exactitude,  promptness,  celerity, 
proportion,  and  even  honesty.  Every  physical  process  pre- 
sumes a  previous  subjective  plan  and   mental  picture.     A 


278        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

few  years  ago  a  gifted  New  York  lawyer^  wrote  a  good- 
sized  volume  entitled  "  Mechanics  and  Faith."  In  a  most 
interesting  and  logical  manner  he  traced  out  the  corre- 
spondences and  revelations,  mental  and  spiritual,  which  a 
study  of  the  principles  of  mechanics  unfolds  and  indorses. 
Mechanical  science,  usually  regarded  as  dry,  is,  in  reality, 
rich  in  elements  of  beauty  and  even  poetry.  Applied  me- 
chanical principles  through  systematic  instruction  would  do 
much  to  idealize  their  exercise  and  lift  them  from  the  realm 
of  drudgery.  To  make  by  hand  even  so  simple  a  thing  as 
a  symmetrical  box  is  not  only  a  physical,  but  a  mental  and 
even  artistic  accomplishment.  The  most  common  works  of 
life  are  capable  of  redemption  from  the  prosy  domain  of 
duty  and  toil,  and  of  investment  with  grace  and  dignity 
from  a  change  of  standpoint.  Through  a  possible  educa- 
tional treatment  the  plainest  tasks  can  be  idealized  and 
made  attractive. 

Wlien  one  considers  the  immense  amount  of  wealth 
that  is  poured  into  the  endowment  funds  of  conventional 
colleges  where  men  are  turned  out  all  of  a  regulation  pat- 
tern, whose  education  is  largely  unavailable  and  often 
utterly  useless,  it  seems  like  a  partial  misdirection  of  a 
great  possibility.  The  splendid  example  of  Colonel  Auch- 
muty  of  New  York  City,  who  founded  the  great  industrial 
school  which  bears  his  name,  is  worthy  of  the  imitation 
of  other  wealthy  gentlemen  who  are  bestowing  their  mil- 
lions in  the  endowment  of  the  purely  intellectual  institu- 
tions, of  which  the  country  is  already  abundantly  supplied. 
It  is  true  that  technical  education  is  receiving  more  atten- 
tion than  heretofore,  and  that  a  limited  number  are  avail- 
ing themselves  of  its  advantages ;  but  it  should  become 
vastly  more  general,  and  instead  of  a  very  few  institutions 
there  should  be  scores.  The  methods  and  varieties  of  in- 
dustrial effort  are  so  numerous  that  there  is  ample  room 
1  Charles  Talbot  Porter. 


DTDTJSTRIAL  EDUCATION.  279 

in  this  great  field,  both  for  the  State  and  for  many  privately 
endowed  institutions.  Its  principles  are  capable  of  indefi- 
nite application  and  expansion.  It  may  extend  from  a 
simple  annex  to  the  common  school  house,  where  for  an 
hour  a  day  boys  could  learn  the  use  of  a  few  simple  tools, 
up  to  the  most  elaborately  equipped  trade-shops  and  great 
technical  institutions. 

The  average  boy  needs  some  useful  outlet  for  his 
abounding  physical  activity.  Often  he  has  no  taste  for 
books,  and  study  to  him  is  perfunctory  and  mechanical. 
He  is  an  untrained  and  ungoverned  force,  liable  not  only 
to  useless  but  to  harmful  activities.  He  needs  something 
to  arouse  his  interest,  develop  his  latent  faculties,  and  to 
turn  his  overflowing  energy  into  some  useful  and  practical 
channel.  An  hour  a  day  of  manual  training  with  its  pre- 
cision and  calculation  will  do  much  to  evolve  true  manli- 
ness and  self-reliance.  To  create  or  construct  something 
tangible  tends  to  inspire  character.  The  development  of 
one  set  of  human  faculties,  through  related  and  reflex  in- 
fluences, invigorates  all  the  others,  therefore  exercises 
should  be  frequently  changed  or  alternated. 

Statistics  show  that  a  large  proportion  of  the  criminal 
class  begin  in  their  downward  career  between  the  ages  of 
fifteen  and  twenty-one.  They  start  out  to  be  honest ;  but 
idleness,  which  is  the  parent  of  all  mischief,  causes  them 
gradually  to  drift  into  crime.  They  find  no  vacancies, 
either  in  business  or  the  professions,  and  with  expanding 
Avants  have  no  honorable  means  to  supply  them.  Had 
they  been  educated  to  industrial  dexterity  they  could  be 
of  use  to  themselves  and  to  society. 

Hon.  Samuel  B.  Capen,  for  many  years  President  of 
the  Boston  School  Board,  and  an  active  philanthropist, 
who  is  much  interested  in  the  subject  of  industrial  edu- 
cation, says : — 


280         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

"  That  there  is  a  special  reason  fer  trade-schools  is  made  more 
apparent  when  we  remember  that,  out  of  every  one  hundred  boys 
that  graduate  from  our  grammar  schools,  only  one  per  cent  enter 
the  ministry,  one  per  cent  become  lawyers,  one  per  cent  physicians, 
five  per  cent  business  men,  and  ninety-two  per  cent  get  a  livelihood 
by  their  hands.  Are  we  doing  all  we  ought  for  the  ninety-two  per 
cent  ?  " 

Another  able  writer  and  expert,  in  speaking  of  trade- 
schools,  says : — 

"  The  trad«-unions  in  these  cities  are  controlled  by  foreigners, 
who  seek  to  confine  their  industries  to  men  of  their  own  nationali- 
ties. They  not  only  refuse  to  teach  an  American  boy  a  trade,  but 
they  combine  to  prevent  him  from  getting  employment  after  he  has 
succeeded  in  learning  it  in  a  trade-school.  This  is  a  situation  of 
affairs  without  parallel  in  any  country  in  the  world,  and  one  which 
will  not  be  tolerated  in  this  country  when  once  public  opinion  has 
been  aroused  to  a  full  comprehension  of  it.  It  is  surely  not  too 
much  for  the  American  people  to  say  that  their  own  sons  shall  not 
only  be  permitted  to  learn  trades,  but  shall  be  permitted  also  to 
work  at  them  after  they  have  learned  them.  We  advise  any  one 
who  is  desirous  of  seeing  the  kind  of  skilled  workingmen  that  the 
American  boy  makes  to  visit  Colonel  Auchmiity's  schools  and  look 
over  a  set  of  photographs  of  his  graduates.  He  will  find  there  a 
body  of  clear-browed,  straight-eyed  young  fellows  who  will  compare 
well  with  the  graduates  of  our  colleges.  This  is  the  stuff  from 
which  laborers  are  made  who  honor  and  dignify  and  elevate  labor, 
not  by  agitating,  but  by  being  masters  of  their  craft,  faithful  in  per- 
formance, and  willing  to  share  its  toil  with  all  comers,  fearing 
honest  competition  from  no  quarter.  Such  men  are  at  once  true 
American  laborers  and  true  American  citizens  of  the  highest  type, 
and  the  educational  system  which  evolves  them  is  a  national  bene- 
faction of  incalculable  value." 

In  seeking  for  remedial  agencies  for  the  vast  amount  of 
social  and  economic  infelicity  of  the  present  time,  there  is 
nothing  so  promising,  and  which  contains  such  grand  possi- 
bilities, as  industrial  training.  It  should  become  as  univer- 
sal as  the  present  intellectual  courses  of  instruction.     To 


INDUSTRIAL   EDUCATION.  281 

co-educate  the  head  and  hands  is  advantageous  for  both. 
If  every  common  school  in  the  land  could  have  an  annex, 
used  for  the  cultivation  of  manual  dexterity,  it  would  be  a 
long  step  toward  the  elimination  of  prevailing  sociological 
ills.  Manual  labor  must  be  lifted  and  dignified  by  an  ad- 
mixture of  the  intellectual  element.  It  can  be  rendered 
positively  attractive  by  judicious  idealization. 


NATURAL  LAW   AND   IDEALISM. 


"  Because  the  soul  is  progressive,  it  never  quite  repeats  itself, 
but  in  every  act  attempts  the  production  of  a  new  and  fairer  whole" 

Emersojt. 


'^^All  nature  is  but  art  unknown  to  thee  ; 
All  chance,  direction  which  thou  canst  not  see." 


Pope. 


"  Up,  my  comrades  !  up  and  doing  I 

Manhood'' s  rugged  play 

Still  renewing,  bravely  hewing 

Through  the  world  our  loay." 

Whittieb. 

"  That  very  law  which  moulds  a  tear, 
And  bids  it  trickle  from  its  source, 
That  law  preserves  the  earth  a  sphere, 
And  guides  the  planets  in  their  course." 

Samuel  Rogers. 


"  Facts  are  stubborn  things." 

Smollett. 


XXIV. 

NATURAL  LAW  AND   IDEALISM. 

The  universal  reign  of  law  is  the  grand  truth,  which,  if 
everywhere  recognized,  would  transform  the  world.  All 
human  infelicity,  whether  physical,  social,  economic,  moral, 
or  spiritual,  comes  from  a  disregard  or  violation  of  the  Es- 
tablished Order.  Law  will  not  and  cannot  bend  to  human 
caprice,  for  its  lines  are  immutable.  It  is  the  final  and 
infallible  touch-stone  which  tests  every  opinion,  institution, 
and  system,  and  from  its  verdict  there  is  no  appeal.  Its 
exact  trial-balances  and  compensations  put  out  of  the  ques- 
tion all  cheats  and  short-cuts,  while  chance  and  even  injus- 
tice are  neutralized  in  the  last  analysis.  It  is  a  ubiquitous 
and  righteous  Judge,  whose  mandates  can  neither  be  dodged 
nor  compromised  with.  The  harvest  will  bear  the  likeness 
of  the  seed  that  was  sown,  whether  in  economics,  morals,  or 
any  other  realm  of  the  mental  economy. 

We  are  largely  blind  to  the  universal  supremacy  of  Law 
because  we  fail  to  recognize  the  positive  relationship  and 
interdependence  of  all  things.  Every  event  and  principle  is 
related  to  and  modified  by  everything  else.  Each  one  of 
these  invisible  but  unbreakable  ties  possesses  a  significance 
and  conveys  an  influence.  As  no  boundary  is  possible,  ex- 
cept in  the  human  consciousness,  there  can  be  no  obstruction 
to  their  orderly  vibrations. 

The  acceptance  of  this  fundamental  establishment  nat- 
urally leads  to  the  consideration  of  two  sequential  problems, 
which  may  be  stated  as  follows  :  What  is  the  nature  of 
LaAv  ?  and.  How  may  we  become  intelligently  certain  of  the 

285 


286        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

direction  of  its  leadings  ?  If  it  be  uurepealable,  it  is  highly 
important  to  find  whether  or  not  it  is  uniformly  good.  A 
superficial  glance  at  this  vital  question  may  make  its  answer 
appear  doubtful.  Take  the  supposed  law  of  "  the  survival 
of  the  fittest,"  which  seems  to  have  a  wide  application,  not 
only  in  the  physical  but  in  the  social  and  economic  realm. 
How  can  it  be  beneficent  ?  It  may  at  once  be  admitted 
that  from  a  material  point  of  view  alone,  this  and  other 
inherent  tendencies  appear  adverse.  Is  that  the  correct 
standpoint  ?  This  directly  suggests  another  question :  Is 
man  body  or  mind  ?  If  any  one  objects  that  such  a  query 
belongs  to  metaphysics,  rather  than  to  political  economy, 
we  reply  that  the  science  of  economics  is  in  the  mind  of 
man.  Labor,  capital,  money,  coinage,  and  tariffs  are  only 
external  and  resultant  phenomena.  Disconnected  from 
their  subjective  relations  they  have  no  significance.  In- 
trinsic political  economy  is  written  within  man's  constitu- 
tion, while  the  things  so  designated  are  only  their  visible 
articulation.  The  outward  manifestation  is  only  the  shadow 
of  the  internal  substance.  All  veritable  social  science  is 
therefore  subjective,  or  in  other  words,  metaphysical.  For 
this  reason  its  conventional  treatment  is  like  the  play  of 
Hamlet  with  the  principal  character  missing. 

But  recurring  to  the  nature  of  Law,  we  take  the  positive 
ground  that  it  is  as  beneficent  as  it  is  universal.  Only  the 
standpoint  which  takes  account  of  an  all-comprehensive  evo- 
lutionary trend  will  reveal  this  significant  fact.  Turning 
to  first  principles :  If  the  grand  purpose  of  creation  be  good, 
all  its  minor  processes  must  be  tending,  even  though  indi- 
rectly, in  the  same  direction.  Law  is  only  a  comprehensive 
name  for  the  orderly  methods  of  the  Creator.  The  supreme 
uniformity  and  reliability  of  phenomena  prove  that  they 
are  divine  manifestations,  and  that  only.  An  approximate 
human  conformity  to  our  highest  interpretation  of  Law  we 
call  good ;  and  such  a  lack  of,  or  non-conformity  as  is  below 


NATURAL  LAW   AND   IDEALISM.  287 

this  standard  we  designate  as  evil.  Only  a  higher  and  truer 
standpoint  than  the  external  and  material  will  enable  us 
wisely  to  interpret  many  forces  of  the  physical  and  economic 
domain  which  seem  destructive. 

The  so-called  law  of  selfishness  when  viewed  from  its 
own  plane  seems  to  be  Law,  but  from  the  altitude  of  un- 
selfishness it  is  only  relative  immaturity.  It  appears  to  be 
Law  from  its  being  so  general.  The  true  beneficence  of 
Law  is  found  only  in  the  breadth  of  its  application ;  as,  for 
instance,  the  seeming  good  of  the  individual  lies  in  his  own 
sole  advantage,  but  a  deeper  view  shows  that  his  truer 
benefit  is  only  contained  in  wider  relationship.  The  indi- 
vidual good  can  only  find  its  highest  realization  within  the 
general  good.  His  supremest  development  cannot  take 
place  by  itself.  The  "  fittest "  gain  that  position  only  by 
being  channels  for  the  less  fit,  and  the  latter  need  the 
former  for  inspiration  and  example.  The  selfish  rich  man 
is  not  only  socially,  but  individually  unfit,  for  his  apparent 
completeness  is  only  superficial.  Selfishness,  faction,  an- 
tagonism, envy,  and  avarice,  though  having  a  kind  of  regu- 
larity which  makes  them  seem  like  laws,  form  no  part  of 
Law.  The  latter  being  uniformly  beneficent  lends  its  bene- 
diction just  in  the  proportion  that  its  methods  are  complied 
with. 

Law  is  not  a  great,  blind,  mechanical  force,  crushing  its 
\'iolators  and  opponents,  but  an  infinitely  potent  agency  to 
be  intelligently  wielded  and  utilized.  Its  wonderful  pos- 
sibilities are  placed  at  our  service.  They  are  like  the 
mechanical  forces  of  the  screw  or  lever  to  the  artisan,  but 
extend  in  all  directions  and  through  all  relations. 

Let  us  advance  a  step  and  note  the  paradoxical  truth 
of  the  principle  that  all  penalty  for  the  violation  of  Law 
is  not  only  inherent  and  corrective,  but  actually  kindly. 
Were  we  able  to  sever  cause  and  effect,  and  abolish  all 
punishment  that  is  seemingly  severe,  violation  would  con- 


288        THE  POLITICAL  ECONOMY  OF  HUMANISM. 

tiuue  until  logically  followed  by  destruction.  If  one  be 
idle,  and  poverty  be  the  natural  penalty,  the  latter  is  not 
an  "  evil,"  but  a  corrective  monitor.  Were  it  possible  to 
entirely  "  abolish  "  it,  idleness  would  continue  indefinitely 
and  find  its  end  in  decay.  All  so-called  economic  ills  have 
bound  up  with  them  the  rectifying  forces  of  self-correction. 
The  slower  we  are  to  learn  their  lessons,  and  the  more  we 
count  them  as  "  evils,"  the  more  severe  the  discipline  that 
will  be  self-enforced.  Antagonism  is  the  most  negative  of 
all  the  negations  of  the  universal  Law  of  Attraction,  and 
it  tlierefore  brings  a  bitter  yet  still  remedial  penalty. 
Whether  in  individual  or  combination,  capital  or  labor, 
rich  or  poor,  high  or  low,  it  can  only  be  transmuted  into 
harmony  and  benefit  through  the  purifying  fires  which 
make  up  inherent  and  severe  retribution. 

In  the  great  economy  of  Law,  intelligent  and  truly  altru- 
istic effort  will  not  have  for  its  object  the  abolishment  of 
penalty,  but  of  that  which  brings  it.  It  is  a  legal  part  of 
Law  that  pain  follows  in  the  train  of  violation.  Penalty  is 
the  shock  we  feel  when  we  come  in  collision  with  Law. 
It  kindly  goads  us  until  we  come  into  conformity,  but  not 
by  a  hair's-breadth  beyond  that  attainment.  In  economics, 
as  elsewhere,  it  is  not  the  punishment,  but  the  sin  which 
bears  it  as  a  fruitage,  that  needs  to  be  eliminated. 

The  fact  that  Law,  in  its  immutable  lines,  can  never  be 
bent  nor  diverted  in  the  least  degree,  is  all  that  prevents  the 
cosmos  from  becoming  chaos.  Eetributory  action  in  every 
department,  physical,  mental,  or  moral,  is  universally  in- 
herent and  corrective  and  never  arbitrary  or  from  the  out- 
side. Our  mistaken  and  antagonistic  attitude  towards  it 
reflects  our  0"wii  hostility  back.  If  we  were  to  receive  it  as 
a  necessary  educator  instead  of  an  angry  opponent,  its  face, 
to  us,  would  be  transformed  so  as  to  express  its  natural 
friendliness. 

Economic  transgressions  always  bring  their  remedies  with 


NATURAL  LAW  AND   IDEALISM.  289 

them,  and  if  the  latter  were  not  bitter  they  would  not  cure. 
We  often  regard  financial  panics  as  unmitigated  calamities, 
but  they  really  cleanse  the  system  of  the  body-politic. 
They  seem  severe  because  they  involve  not  only  the  econom- 
ically guilty,  but  also  thousands  of  the  innocent  and  of  non- 
participants.  Human  relationship  is  so  intimate  and  uni- 
tary that  those  who  are  lawful  suffer  with  and  for  those  who 
are  lawless.  The  latter  also  find  some  degree  of  succor  in 
the  virtues  of  the  former.  Such  a  commingling  —  though 
having  a  superficial  appearance  of  injustice  —  breaks  the 
boundary  walls  of  the  smaller  or  personal  interest,  and  by 
its  educational  revelations  brings  to  view  the  larger  and 
truer  Unit.  It  shows  that  there  is  no  selfish  element  in 
Law,  and  that,  paradoxical  as  it  may  at  first  appear,  it  is 
best  that  the  innocent  should  divide  the  penalties  of  the 
guilty  with  them.  Law  has  made  no  mistake,  even  though 
our  selfish  concern  makes  her  seem  unreasonable.  If  eacli 
suffered  solely  for  his  own  economic  transgressions,  it  might 
teach  him  prudence  on  his  own  account,  but  now  he  finds 
that  his  interest  is  woven  into  the  very  warp  and  woof  of 
society.  It  is  simply  impossible  for  him  to  live  unto  him- 
self, even  from  the  standpoint  and  purpose  of  self-interest. 
To  help  himself  through  the  promotion  of  the  general  good, 
at  length  reveals  the  larger  solidarity.  The  fact  that  trans- 
gressors and  non-transgressors  are  inextricably  commingled 
at  first  seems  unfair,  and  even  unjust ;  but  under  the  light  of 
a  truer  interpretation  it  is  found  to  be  not  only  wise  but 
positively  beneficent.  It  is  a  standing  object-lesson  of  racial 
unity.  Law  is  incapable  of  true  interpretation  under  any 
fragmentary  restriction.  One's  superficial  or  apparent  ad- 
vantage may  suffer  from  things  beyond  liis  own  control ;  but 
when  the  innumerable  lines  of  relationship  and  compensa- 
tion are  traced  out,  it  is  finally  found  that  he  receives  his 
supremest  good  encompassed  within  that  of  his  fellows. 
Sometimes  at  the  close  of  a  muggy  summer's  day,  when 


290         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

the  atmosphere  is  heavy  and  murky,  a  thunder-storm  comes 
as  a  purifier,  and  the  air  is  made  balmy  and  the  face 
of  Nature  becomes  bright  and  beautiful.  The  process  is 
severe,  and  occasionally  involves  local  distress ;  so  all  active 
advancement  has  some  accompaniment  of  evolutionary  grow- 
ing-pains. Expansion,  extravagance,  and  speculation  would 
go  on  until  general  financial  inebriety  ensued,  were  it  not 
for  occasional  economic  cyclones  which  tear  away  the  false 
masks  that  have  been  thrust  upon  natural  and  fundamental 
principles.  When  financial  depression  comes,  there  is  a 
general  readjustment  of  economic  compasses,  and  the  bear- 
ings are  again  correctly  taken.  The  weak  spots  of  a  sophis- 
tical political  economy  are  uncovered.  It  would  be  impos- 
sible for  Law,  as  a  schoolmaster,  to  educate  men  by  the  use 
of  any  milder  means- 
Even  the  distress  and  poverty  which  everywhere  follow 
in  the  wake  of  a  monetary  crisis  have  their  compensations. 
They  not  only  stimulate  industry  and  production,  but  inspire 
a  fraternal  spirit  and  awaken  a  general  altruism.  Such  a 
condition  warms  the  chill  atmosphere  of  selfishness,  and 
brings  into  high  relief  the  claims  of  man  upon  his  brother 
man.  The  sweetness  of  charity  is  realized,  and  society  is 
brought  to  see  and  feel  that  it  is  an  Organism.  Man  discov- 
ers that  he  cannot  live  to  himself  alone,  and  that,  in  a  vital 
sense,  he  is  his  "  brother's  keeper."  Not  only  panics,  but 
all  economic  ills,  are  monitors  that  rise  up  to  teach  us  lessons 
that  we  refuse  to  learn  in  any  easier  way. 

Eich  outward  environment  does  not  bring  harmony  and 
contentment,  even  though  the  world  believe  the  reverse,  as 
indicated  by  the  mad  race  for  power,  wealth,  and  position. 
Material  attainment,  however  wonderful,  will  never  usher 
in  the  Golden  Age.  The  wealth  of  invention,  which  has  so 
greatly  augmented  man's  physical  accomplishment  during 
the  past  fifty  years,  has  conferred  no  additional  happiness. 
Material  progress  will  be  utterly  barren  in  the  proportion 


NATURAL  LAW   AND   IDEALISM.  291 

tliat  it  becomes  an  end  instead  of  an  accessory.  The  greatly 
broadened  scale  of  material  comforts  only  increases  man's 
sullen  discontent  with  his  lot.  Humanitarians  who  confine 
their  efforts  to  the  amelioration  of  physical  conditions  alone 
only  touch  the  surface  of  human  misery.  Without  a  higher 
evolution  of  character,  if  every  one  were  housed  in  a  palace, 
dissatisfaction,  rivalry,  and  restlessness  would  still  be  the 
rule. 

Law  seems  stern  and  even  baneful,  when,  through  our 
ignorance,  we  foolishly  antagonize  it.  But  we  may  render 
it  not  only  harmless,  but  transmute  it  into  an  infinitely 
powerful  ally.  He  who  utilizes  steam  or  electricity  in  ac- 
cordance with  their  own  laws,  multiplies  his  physical  accom- 
plishment a  thousand-fold ;  but  if  he  disregard  their  orderly 
methods,  and  strive  to  impose  his  own  notional  theories  upon 
them,  he  will  receive  the  judgment  of  penalty.  The  thor- 
ough comprehension  of  Law  is  therefore  the  supreme  human 
attainment. 

In  the  popular  mind  the  idea  of  Law  in  political  econ- 
omy is  largely  limited  to  the  law  of  human  legislation. 
The  collective  will  of  society,  as  expressed  in  statute  books, 
is  by  no  means  identical  in  its  mandates  with  Law,  although 
government  in  modern  times  is  increasingly  seeking  to 
moidd  its  expressions  after  the  natural  order.  Man  was 
very  slow  in  recognizing  the  dominance  of  Law  in  the  phe- 
nomena of  matter,  and  it  will  take  him  still  longer  to  com- 
prehend that  it  is  applicable  to  himself.  In  past  ages, 
ethical  and  political  economy  aimed  at  social  standards 
framed  according  to  some  notional  abstract  of  what  human 
nature  ought  to  be,  rather  than  basing  it  upon  man's  consti- 
tution as  it  is.  This  was  owing  to  the  entire  lack  of  any 
comprehension  of  the  great  modern  interpreter  —  Evolution. 
Ancient  philosophers  tried  abstractly  to  build  out  of  tlieir 
own  logic  that  knowledge  which  is  only  attainable  by  a  care- 
ful observance  of  the  working  of  laws  through  existing  facts 


292         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

which  express  them.  Plato's  Republic,  as  an  ideal  State, 
was  outlined  from  his  opinions  of  what  society  ought  to  be. 
Taking  as  his  starting  point  the  supreme  importance  of  the 
State,  other  relations,  like  family  life  and  affection,  were 
obliterated  or  left  out.  Any  processes  of  reasoning  which 
leave  Nature  and  her  methods  out  of  the  account,  or  even 
make  her  secondary,  are  of  no  avail. 

The  most  important  mistakes  of  the  world  have  been  its 
attempts  —  often  well  meant  —  to  override  or  disregard  the 
Established  Order.  Men  think  that  they  can  formulate 
some  plan  superior  and  more  expeditious  than  evolutionary 
processes.  Instead  of  divining  that  the  very  lack  of  uni- 
formity among  mankind  is  a  natural  and  powerful  force 
working  toward  universal  progress,  they  make  comprehen- 
sive plans  for  union  through  likeness.  Law  makes  up  unity 
of  diversity.  Organism  of  every  grade  is  always  a  harmo- 
nious blending  of  unlike  functions. 

Nature  has  no  short-cuts,  magic,  or  spontaneity.  But  her 
activities,  though  immutable,  are  always  elastic  and  comprise 
the  only  perfect  means  to  ends.  Mind  being  as  amenable  to 
Law  as  matter,  political  economy  is  an  exact  science.  But 
it  becomes  so  to  our  consciousness  only  to  the  degree  that 
we  move  parallel  to  its  lines,  and  trace  out  the  ties  which 
bind  events  to  their  antecedent  causation.  Failing  in  this 
we  realize  discord  and  confusion. 

But  Law,  though  unchangeable  in  itself,  is,  to  us,  pro- 
gressive as  we  make  advances  onto  its  higher  planes.  Our 
progression  comes  from  the  growing  supremacy  of  the 
higher  over  the  lower  motives  in  the  human  mind,  and  the 
former  are  no  less  natural  than  the  latter.  The  Ideal  to- 
wards which  our  faces  are  turned  is  as  positive  as  the  Real 
which  is  at  our  side.  The  difference  is  only  in  evolutionary 
location,  the  former  being  farther  along  the  great  highway. 

Human  legislation  has  largely  been  an  effort  to  impose 
collective   notional   Will  —  at    the    time   ruling  —  without 


NATUBAL  LAW   AND   IDEALISM.  293 

mucli  search,  for  tlie  true  Criterion.  Just  where  it  has 
deflected  from  this  standard  it  has  failed. 

But  there  is  a  notable  dissimilarity  between  natural 
and  legislative  law  which  is  significant.  Human  enactment 
is  almost  entirely  negative.  It  consists  of  a  comprehensive 
and  ever  repeated,  "  thou  shalt  not."  Natural  Law  is  posi- 
tive and,  so  far  as  it  is  observed,  negations  are  left  behind. 
Negation  is  the  absence  of  any  thing.  Stealing,  cheating, 
and  all  economic  abuses,  are  lacks  or  non-recognitions  of  the 
normal  social  economy.  They  are  spots  where  man  fails  to 
interpret  the  laws  that  are  written  within  his  own  constitu- 
tion. Hence  they  introduce  inharmony  and  subjectively 
nullify  the  Established  Order.  Selfishness  is  not  natural, 
in  the  high  and  normal  sense  of  that  term,  but  it  has  the 
appearance  of  a  law  because  animality  or  human  immaturity 
is  common. 

That  which  men  have  in  themselves  they  see  everjrwhere 
objectively  reflected.  One  who  is  disposed  to  cheat  sees 
cheating  in  the  atmosphere  around  him,  until  he  mistakenly 
concludes  that  it  is  a  part  of  the  Established  Order.  But 
it  is  entirely  in  men,  and  Law  knows  it  not. 

Ideal  political  economy  is  the  pure  natural  system  un- 
marred  by  the  clouded  consciousness  of  its  daily  multiform 
infractions.  Idealism  is  as  profitable  in  economics  as  in 
any  other  great  subdivision  of  Truth.  It  consists  of  hold- 
ing up  the  true  potentiality  or  fulness  of  what  already 
is.  It  is  not  a  vapory  uncertainty  of  the  future  but  the 
present  perfect  substance.  If  men  everywhere  held  the 
Criterion  before  them  instead  of  comparing  themselves 
among  themselves,  general  progress  towards  the  normal 
would  be  rapid.  Ideals  are  always  striving  to  actualize 
themselves. 

The  great  desideratum  of  man  is  not  an  ever  increasing 
aggregation  of  facts,  but  rather  a  clearer  perception  of  the 
outlines  of  the  Normal.     We  must  also  dismiss  the  idea 


294         THE  POLITICAL  ECONOMY  OF  HUMANISM. 

that  because  abnormity  is  common,  it  is  Law.  Adam  Smith 
made  it  plain  that  Nature  in  the  human  mental  economy 
had  made  provisions  for  every  man,  so  long  as  he  observed 
the  principles  of  justice,  to  use  both  his  own  industry  and 
capital  with  the  utmost  freedom  of  competition.  This  har- 
mony with  Nature  he  taught  would  result  in  the  largest 
measure  of  individual  and  national  wealth  and  prosperity. 
In  proportion  as  hiunan  legislation  is  more  restricted  than 
Natural  Law,  men  are  deprived  of  the  power  to  work  out 
ideal  results.  Its  bungling  interference  not  only  defeats 
the  end  sought,  but  deranges  all  the  delicate  and  elastic 
forces  which,  if  left  to  their  higher  working,  would  hasten 
normal  development.  If  it  deprives  a  laborer  of  a  part  of 
his  hours,  or  if  his  union  orders  him  out  of  a  situation,  in 
either  case  he  loses  something  of  his  natural  freedom.  Un- 
restricted competition,  both  for  labor  and  capital,  is  the 
only  full  measure  of  liberty  for  the  individual  and  the 
nation.  All  artificial  forces  that  seek  to  install  themselves 
under  the  plea  of  special  advantage  to  some  class  or  faction, 
in  their  practical  working  are  only  new  forms  of  tyranny 
which  retard  natural  evolutionary  advancement.  Every 
fraction  must  find  its  good  in  that  of  the  whole.  The 
human  phalanx  cannot  be  turned  aside  into  artificial  by- 
paths, but  its  way  is  already  smooth  along  its  own  natural 
highway. 

Political  economy  is  the  outward  expression  of  the  play 
of  the  forces  of  the  mind.  It  is  like  a  game  of  chess  ;  the 
pieces  being  moved  after  the  real  move  has  been  made  in 
the  mind  of  the  player.  As  the  powers  that  are  within 
man  are  tamed,  controlled,  and  brought  into  orderly  har- 
mony, all  external  phenomena,  whether  of  labor,  capital, 
land,  or  money,  will  exactly  correspond,  for  the  reason  that 
they  are  secondary  and  expressive.  Mind  is  the  Avorker, 
and  these  are  its  tools. 

The  spirit  of  association  must  broaden  its  aims  and  in- 


NATURAL   LAW   AND   IDEALISM.  295 

terests.  It  may  be  a  positive  institution,  but  if  its  piirpose 
be  unfriendly  to  the  general  and  greater  Unit,  to  that  degree 
it  is  normally  unlawful. 

Intellectual  logic  is  inadequate  to  the  delicate  interpre- 
tation of  Natural  Law,  and  of  its  articulated  adjustment  to 
human  affairs.  The  intuitive  faculty  being  keener,  and  of 
higher  grade,  is  however  able  to  make  its  leadings  so  clear 
that  they  may  be  translated  into  outward  harmonious  ex- 
pression. Intuition  alone  is  able  to  put  its  ear  to  the 
ground  and  distinguish  between  discordant,  even  though 
faint  jars,  and  concordant  vibrations.  Only  that  delicate 
insight  which  lies  deeper  than  a  mere  intellectual  account 
of  phenomena,  can  cognize  the  lights  and  shades  of  those 
fine  but  immutable  golden  threads  which  are  shot  through 
the  entire  social  fabric. 

The  supreme  and  ideal  political  economy  can  only  be 
formulated  from  the  standpoint  of  racial  unity.  Any  study 
of  combinations,  competitions,  and  co-operation,  cannot  be 
exhaustive  on  the  basis  of  a  fragmentary  society  with 
divided  interests.  Only  a  synthetic  interpretation  is  ade- 
quate, because  analysis  and  separation  invariably  show  dis- 
proportion. Man  is  One  ;  and  just  in  the  measure  that  that 
grand  fact  is  installed  in  human  consciousness,  are  all  the 
natural  principles  found  to  be  altruistic.  Any  philosophy 
of  Humanity  is  incomplete  which  does  not  regard  it  as  an 
Organism.  Its  members,  though  unlike,  have  one  interest 
and  one  order.  Any  suffering  or  rejoicing  cannot  be  local- 
ized, for  its  vibrations  thrill  to  the  utmost  limits. 


XXV. 
GOLD  PRODUCTION  AND  VALUES. 

The  remarkable  increase  in  the  yearly  product  of  the 
world's  basic  standard  for  the  measurement  of  values, 
during  the  last  decade  of  the  nineteenth  century,  seems 
to  have  attracted  much  less  attention  from  economists  and 
sociologists  than  its  importance  demands.  Not  only  has 
its  enhancement  been  unprecedented,  but  the  promise,  both 
for  the  immediate  and  more  distant  future,  is  startling. 
This  is  true,  not  only  in  its  possibilities,  but  in  what  may 
be  regarded  as  assured  results.  There  is  no  question,  also, 
regarding  the  intimate  relation  between  the  product  of  the 
"  yellow  metal,"  in  the  world  at  large,  and  values  in  every 
detail  of  commercial  and  financial  transactions,  national 
and  international.  The  great  change  that  is  now  taking 
place  is  so  silent  and  subtle  in  its  progress  that  it  is  gen- 
erally unobserved.  But  in  its  resistless  sweep  it  will  indi- 
rectly affect  ethical  and  social  relations,  as  well  as  those 
which  are  purely  economic.  This  fact  emphasizes  the  com- 
plexity of  the  problem  which  will  soon  press  for  solution. 

By  the  consensus  of  modern  civilized  nations,  gold  is 
the  most  stable  and  only  available  basic  monetary  stand- 
ard. This  may  now  be  regarded  as  a  settled  question.  But 
while  this  is  true,  and  while  there  is  nothing  else  that  could 
anywhere  nearly  as  well  fill  the  necessary  requirements, 
the  world  is  confronted  by  a  "  condition  as  well  as  a  the- 
ory." For  even  this  most  available  of  all  things  for  the 
purpose  is  not  unchangeable  in  its  relations.  As  surely  as 
gravitation  or  the  tides,  the  law  of  supply  and  demand, 

296 


GOLD    PRODUCTION    AND    VALUES.  297 

even  here,  will  finally  get  in  its  work.  The  general  expan- 
sion of  values  at  the  beginning  of  the  new  century  means 
more  than  the  presence  of  a  temporary  period  of  specula- 
tive activity,  and  more  than  that  sound  money  has  been 
permanently  inaugurated. 

Economic  law  provides  that  with  the  present  phenomenal 
output  of  gold  there  will  come  a  great  and  continuous  en- 
hancement in  the  prices  of  all  commodities.  There  will 
never  be  a  return  to  the  general  low  values  which  prevailed 
from  1893  to  1896,  though  of  course  the  usual  minor  varia- 
tions will  occur  while  the  general  trend  continues. 

Modern  science  has  obtained  such  a  tremendous  grasp 
upon  mechanical,  electrical  and  chemical  forces,  that 
through  their  cooperative  agency  Mother  Nature  will 
yield  up  her  treasures  in  wonderful  volume.  This  com- 
mand, which  man  has  gained  through  a  rapid  unfoldment 
of  his  knowledge  of  natural  laws,  multiplies  his  potential- 
ity and  confers  gigantic  power  which  he  wields  with  ever- 
increasing  dexterity.  A  steady  expansion  beyond  anything 
heretofore  dreamed  of  is  therefore  inevitable.  But  for  two 
reasons  it  will  not  cause  any  sudden,  violent,  or  revolution- 
ary disturbance :  (1)  adjustment  will  go  on,  but  gradually, 
and  (2)  all  the  leading  nations  will  move  together  along 
parallel  lines.  With  modern  ties  and  relations,  all  are  but 
interrelated  parts  of  one  grander  unit.  But  if  any  one 
nation  were  peculiar,  great  disorder  and  confusion  would 
ensue  in  its  own  experience,  and  the  same  would  be  radiated 
in  proportion  to  its  relative  importance. 

But  it  cannot  be  denied  that  the  process  may  subtly 
impair  the  relative  value  of  capital  as  related  to  commodi- 
ties, using  the  latter  term  in  a  broadly  inclusive  sense. 

Suppose  that  the  purchasing  power  of  a  given  number 
of  "dollars"  becomes  materially  less  than  it  is  to-day.     In 


208       THE   POLITICAL   ECONOMY   OF   HUMANISM. 

that  event  it  is  evident  that  capital  which  remains  in  the 
shape  of  cash,  credits,  bonds,  fixed  annuities,  incomes,  or 
other  evidences  of  indebtedness  in  any  form,  will  suffer 
relative  deterioration.  On  the  other  hand,  all  tangible 
property,  outside  of  these,  would  tend  toward  relative 
appreciation  in  current  value.  Labor  values  and  salaries 
would  share  the  enhancement  with  commodities.  The 
monetary  circulating  medium  per  capita  would  materially 
increase  from  year  to  year.  The  complex  process  here 
outlined  has  been  going  on  during  some  time  in  the  past, 
but  its  future  trend  will  doubtless  be  much  more  pro- 
nounced. It  is  evident  that  the  general  trend,  even  though 
so  slow  as  to  be  generally  unobservable,  will  be  toward  the 
appreciation  in  value  of  good  stocks,  and  the  reverse  in 
bonds.  The  former  will  have  an  advantage  in  the  expan- 
sive tendency  in  commodities,  while  the  latter  will  be  sub- 
ject to  the  gradually  shrinking  potency  of  money  in  its 
relations. 

Statistics  are  dry  and  need  hardly  be  touched  upon,  for 
the  facts  are  well  known  to  everyone  who  has  given  the 
subject  any  attention.  They  all  show  that  the  great  expan- 
sive movement  is  well  under  way.  As  recently  as  1891 
the  total  gold  output  was  given  at  $130,650,000,  while  that 
of  1899  was  estimated  at  more  than  $300,000,000,  and  this 
with  the  great  Transvaal  mines  idle  for  the  last  quarter  of 
that  year.  With  these  added  in  the  future  to  the  wonder- 
ful increase  elsewhere,  which  seems  to  be  world-wide,  the 
promise  is  without  precedent.  The  great  multiplication 
of  the  fields  of  supply  is  immensely  enhanced  by  the  revo- 
lution in  the  nature  of  the  mining  processes  before  noted. 
Ores  of  low  grade  that  formerly  were  entirely  unavailable 
are  now  made  to  yield  a  large  profit. 

Unlike  most  of  the  cheaper  metals,  but  a  small  propor- 


GOLD   PRODUCTION   AND    VALUES.  299 

tion  of  the  gold  product  is  used  up  or  disappears,  and  but 
a  light  and  slowly  increasing  percentage  is  consumed  in 
the  ornamental  arts.  The  supply  -which  is  available  for 
coinage,  therefore,  will  rapidly  come  into  evidence.  As  a 
result  of  this  new  condition  which  confronts  the  civilized 
world,  some  very  intricate  problems  must  soon  be  dealt 
with.  Long-lived  corporations  and  institutions,  as  for 
instance  great  life  assurance  companies,  banks,  and  the 
trustees  of  endowment  funds,  will  be  likely  to  find  the 
adjustment  to  actual  conditions  not  easy.  "When  one  or 
two  decades  of  the  twentieth  century  shall  have  passed, 
a  dollar  will  doubtless  still  be  called  a  dollar,  but  it  may 
stand  for  materially  less  than  it  does  to-day. 


XXVI. 

SOCIAL  EXPERIMENTS   IN  AUSTRALASIA. 

Since  the  time  when  the  chapter  on  "  Socialism  as  a 
Political  System  "  (XIII.)  was  written,  new  departures  of 
that  nature  upon  an  extensive  scale  have  been  in  progress 
in  the  various  States  of  Australasia.  Some  of  these  began  a 
few  years  earlier,  but  not  until  recently  had  sufficient  time 
elapsed  to  practically  test  their  working.  It  is  evident 
that  with  such  changes  their  logical  results  cannot  be 
brought  into  complete  fruitage  in  a  brief  period.  In  the 
great  antipodal  country  in  question,  the  political  control 
of  the  State  has  been  extended  into  a  variety  of  functions 
which  have  had  no  trial  elsewhere. 

Somewhat  detached  from  the  great  competitive  and 
commercial  currents  of  the  world  at  large,  and  with  a 
population,  not  only  homogeneous  in  unusual  degree,  but 
also  enthusiastic  in  confidence  as  to  a  successful  outcome, 
all  the  preliminary  conditions  were  very  promising.  If 
in  the  present  evolutionary  stage  of  human  development, 
political  socialism  were  to  accomplish  ideal  results,  and 
to  furnish  a  practical  solution  for  common  social  and 
economic  ills,  a  favorable  demonstration  here  might  surely 
be  expected.  The  new  movement  has  attracted  wide 
attention  as  an  object-lesson,  and  especially  the  eyes  of 
enthusiastic  believers  in  such  an  economy  have  been  cen- 
tered upon  what  might  well  be  called  a  social  drama. 
Does  a  great  increase  of  governmental  paternalism  arouse 
beneficent  forces  and  prove  a  saving  power  ?  That  is  the 
crucial  question.     Some  persons  of  sentimental  disposition 

300 


SOCIAL   EXPEEIMENTS   IN    AUSTEALASIA.  301 

have  been  inclined  to  assume  results  not  yet  visible  which 
seem  quite  unwarranted.  More  careful  and  conservative 
examination  reveals  the  fact  that  there  exist,  not  only- 
great  drawbacks,  but  that  they  are  steadily  increasing. 
As  a  more  rational  and  judicial  temper  has  been  developed, 
and  as  the  early  glamour  has  worn  off,  the  more  sober  and 
accurate  accounts  turn  out  to  be  sadly  short  of  anticipa- 
tions. With  the  outward  frame-work  and  machinery  all 
new  and  brightly  polished,  it  is  yet  discovered  that  average 
human  nature  has  not  been  transformed,  but  is  much  the 
same  as  ever.  Unscrupulousness  and  selfishness  have  not 
departed,  and  what  is  yet  more  discouraging,  they  now 
have  multiplied  opportunities.  Former  evils  take  on  new 
forms,  and  their  active  exercise  crops  out  upon  an  in- 
creased area. 

The  very  evident  deadening  of  independence  and  enter- 
prise, the  general  disposition  to  lean  upon  the  State,  the 
favoritism  bestowed  upon  classes  and  unions,  the  public 
subservience  to  illegitimate  demands  —  all  these  and  kin- 
dred tendencies  —  index  the  general  trend.  A  constituency 
government  where  each  class  and  section  try  to  fatten  at 
the  public  crib  has  taken  the  place  of  one  where  a  unitary 
and  broad  statesmanship  should  be  concerned  for  the 
public  good. 

The  very  cumbersome  and  inefficient  service  which  is 
rendered  by  the  railways  is  in  striking  contrast  with  the 
remarkable  capacity,  speed  and  cheapness  which  charac- 
terize those  of  the  United  States.  Kailways  are  the 
natural  arteries  through  which  the  life-blood  of  the  com 
merce  and  enterprise  of  a  nation  surges,  and  favoritism 
and  a  lack  of  living  competition  and  energy  result  in 
stagnation  and  decay.  When  political  party  and  class 
influences  rather  than  merit  and  efficiency  form  the  basis 


302       THE   POLITICAL   ECONOMY   OF   HUMANISM. 

for  lucrative  positions,  the  result  may  be  imagined,  and 
this  in  all  grades  of  service,  from  President  down  to 
brakeman  and  common  laborer. 

To  take  some  of  the  enthusiastic  statements  made  by 
those  who  insist  that  their  theories  must  work,  so  colors 
the  situation  that  conclusions  must  be  determined  alone 
by  facts.  Only  calm  and  accurate  information  will  reveal 
the  whole  truth.  This  Utopian  quarter  of  the  globe  has 
been  characterized  as  "the  country  without  strikes,"  and 
in  various  ways  painted  in  bright  colors.  But  with  all 
their  evils,  strikes  may,  at  least,  be  said  to  be  evidences 
of  life. 

It  is  increasingly  evident  that  the  final  outcome  of 
the  whole  movement  will  prove  that  the  highway  to  a 
true  and  ideal  socialism  —  which  is  really  a  collective 
and  cooperant  individualism  —  is  not  through  any  politi- 
cal device  or  short-cut.  The  real  foundation  must  be 
within  the  hearts  and  characters  of  men,  and  not  in  any 
technical  and  artificial  framework  which  can  be  erected 
outside.  It  must  come  from  the  prompting  of  an  inner 
spirit  which  wells  up  in  the  average  individual,  for  it  is 
not  a  materialistic  and  political  contrivance  which  is 
mainly  dramatic  and  spectacular.  The  more  elaborate 
the  external  machinery  the  less  inherent  warmth  and 
spontaneity. 

With  the  above  generalization  of  laws  which  are  uni- 
formly operative,  we  may  now  make  a  more  specific  and 
concrete  study  of  conditions  in  Australasia.  Many  of  the 
tabulated  statistics  and  facts  are  from  the  official  year- 
book, and  for  others  acknowledgment  is  made  to  Mr. 
Hugo  R.  Meyer,  Instructor  in  Political  Economy,  Harvard 
University,  who  has  made  a  special  and  thorough  study  of 
the  same.     Through  his  courtesy  and  convenient  compila- 


SOCIAL   EXPERIMENTS   IN   AUSTRALASIA.         303 

tion,  facts,  which  also  may  be  found  in  public  documents, 
are  given  to  the  public.  It  is  not  here  proposed  to  go 
much  into  detail,  but  only  to  note  some  general  results 
•which  prove  the  validity  of  applied  natural  law  in  social 
and  economic  relations.  What  seemed  for  a  little  while 
to  be  favorable  results  during  the  process  of  the  experi- 
ments in  Australasia,  turn  out  to  be,  not  profits  and  wages 
due  to  the  new  system,  but  the  direct  sequence  of  an  influx 
of  money  borrowed  upon  private  and  public  account  from 
Great  Britain.  So  long  as  this  financial  stream  was  flow- 
ing in,  and  pay-day  was  in  the  future,  moderate  prosperity 
apparently  prevailed.  But  it  was  rather  artificial  than 
natural.  Population  was  increasingly  concentrated  in  the 
capital  cities,  and  the  resources  of  the  country  outside 
were  but  feebly  developed.  Even  the  relatively  light 
business  performed  by  the  State  railways  was  indirectly 
dependent  in  large  degree  upon  this  temporary  influx.  In 
many  ways  the  new  experiments  are  proving  costly. 

The  people  of  Victoria,  1,200,000  in  number,  have 
had  to  raise  by  taxation  each  year  between  £700,000 
and  £800,000  to  pay  the  interest  upon  bonds  issued  for 
railways  and  other  ventures  that  do  not  pay  their  own 
expenses. 

In  New  Zealand,  with  a  population  of  730,000,  the 
railway  deficit  for  the  last  ten  years  has  averaged  £212,000 
a  year.  There  has  been  some  recovery  from  the  great 
depression  which  prevailed  a  few  years  ago,  but  it  has 
clearly  been  traceable  to  private  enterprise.  This  has 
been  mainly  in  the  export  trade  in  frozen  mutton,  which 
so  far  happens  to  be  outside  the  functions  of  the  State. 
It  is  a  significant  fact  that  the  State  railways,  originally 
built  at  a  cost  of  £16,400,000,  during  the  year  1898  car- 
ried only  2,518,000   tons,   while  the  vessels  that  cleared 


304        THE    POLITICAL   ECONOMY    OF    HUMANISM. 

coastwise  and  entered  coastwise  had  a  tonnage  capacity  of 
5,900,000  tons. 

State  investments  which  fall  short  either  partially  or 
wholly  to  pay  their  way  must  be  supported  by  the  tax- 
payer. Not  only  the  shortage  in  running  expenses  and 
interest  on  bonds,  but  the  principal  of  unprofitable  ventures, 
must  be  made  up  by  the  people.  It  would  be  difficult  to 
find  any  industrial  venture  conducted  by  the  State  —  which 
practically  means  the  dominant  political  party  —  with  any- 
thing like  the  economy  and  wisdom  which  characterize 
private  administration.  In  1890  the  indebtedness  of  the 
Australasian  colonies  to  Great  Britain  on  account  of  loans 
to  joint-stock  companies  and  individual  enterprises  was 
estimated  to  be  £115,000,000.  In  1897  this  had  been 
reduced  to  £85,000,000,  not  by  payment,  except  in  small 
part,  but  by  shrinkage.  The  obligations  to  the  British 
investor,  which  had  been  made  at  5  or  6  per  cent  interest, 
were  also,  from  force  of  circumstances,  very  generally 
scaled  down  to  an  average  of  about  3^  per  cent  on  that 
part  of  the  principal  which  had  not  been  completely 
wiped  out. 

In  the  aggregate,  Australasia,  as  a  group  of  States,  had 
borrowed,  up  to  1890,  about  £215,000,000  on  an  average 
interest  of  about  4.08  per  cent.  In  1898  a  considerable 
part  of  the  money  had  been  so  unwisely  invested  that  it 
was  yielding  little  or  no  return.  But  however  the  private 
and  corporate  indebtedness  had  been  scaled  down,  that  of 
the  government  at  large  must  be  taken  care  of,  otherwise 
the  credit  of  the  whole  combination  of  States  would  be 
ruined. 

Australasia  is  mainly  a  pastoral  country,  though  about 
one-half  of  the  habitable  area  is  susceptible  to  cultivation, 
wheat-raising  being   the  most  important  industry.     But  a 


SOCIAL   EXPEEEMENTS    IN    AUSTRALASIA.  305 

general  preference  for  city  and  town  life  prevents  extended 
agricultural  settlement,  and  so  the  resources  of  the  country 
remain  undeveloped.  The  transportation  of  this  wheat  to 
market  furnishes  a  very  striking  lesson  regarding  the 
efficiency  of  government  railways,  as  compared  with  those 
which  are  handled  by  private  enterprise.  Wheat  raised 
in  the  United  States  for  export  is  transported  by  rail  upon 
an  average  of  from  a  thousand  to  fifteen  himdred  miles. 
In  Australia  the  maximum  haul  is  only  between  two  and 
three  hundred  miles,  which  is  a  notable  contrast.  This 
great  advantage  in  distance  is  neutralized  by  the  exces- 
sively high  charges  which  the  cumbersome  Australian 
system  renders  imperative.  This  short  distance  carriage 
of  wheat  in  Victoria  and  New  South  Wales,  in  1899  cost, 
on  an  average,  as  much  as  it  did  to  ship  it  from  Chicago 
to  Liverpool.  What  a  practical  commentary  upon  the 
relative  merits  of  paternalism  with  its  unbusiness-like 
methods,  and  the  living  elastic  forces  of  what  may  be 
termed  scientific  transportation.  The  Australian  producer 
is  still  further  at  a  disadvantage  in  consequence  of  the  arti- 
ficial scarcity  of  farm  labor.  When  unskilled  labor  can 
find  urban  employment  on  the  public  works  at  eight  hours 
a  day,  at  a  minimum  wage  dictated  by  the  labor  imions, 
few  will  be  willing  to  work  in  accord  with  the  natural 
demand  based  upon  efficiency.  They  have  a  better  thing 
at  the  public  crib,  and  therefore  production  is  restricted 
and  enterprise  deadened.  But  a  majority  are  so  wedded 
to  "  advanced "  theories  and  to  a  sentimental  dependence 
upon  the  State  that  it  will  doubtless  require  a  long  and 
disastrous  experience  to  open  their  eyes  to  the  necessity 
of  compliance  with  natural  law  and  individual  indepen- 
dence. So  long  as  people  are  willing  to  ha  taxed  to  support 
an   ever   increasing   number   of    government   dependants, 


306       THE   POLITICAL  ECONOMY   OP   HUMANISM. 

under  the  delusive  idea  that  this  is  a  kindness,  and  that  it 
has  any  of  the  elements  of  a  true  socialism,  this  unfortu- 
nate condition  of  affairs  will  continue.  Instead  of  en- 
nobling work  and  enterprise  through  an  ideal  of  their 
intrinsic  normality,  the  doctrine  is  practically  inculcated 
that  they  are  undesirable  and  to  be  avoided  as  far  as 
possible. 

The  discovery  of  gold  in  Australasia  in  1851  caused  a 
large  volume  of  immigration,  which  for  a  time  resulted  in 
a  temporary  prosperity.  But  in  a  few  years  a  diminution 
of  the  gold  excitement  caused  a  movement  of  workmen 
back  to  the  cities  and  towns,  and  a  period  of  severe  indus- 
trial depression  followed.  By  1861  the  capital  cities  con- 
tained about  twenty-two  per  cent  of  the  total  population. 
Organization  into  unions  of  the  city  workmen  followed 
with  the  eight-hour  movement,  and  the  wielding  of  a 
political  power  which  turned  legislation  in  favor  of  a  class 
interest.  This  congestive  increase  of  population  into  the 
large  cities  continued  until,  during  the  decade  ending  with 
1891,  Sydney  absorbed  over  fifty  per  cent  of  the  entire 
immigration  into  New  South  Wales,  and  Melbourne  took 
seventy-five  per  cent  of  the  total  increase  of  the  population 
in  Victoria.  This  congestive  tendency  was  so  general  that 
in  1891  it  was  estimated  that  more  than  forty -two  per  cent 
of  the  whole  Australasian  people  resided  in  cities  of  eight 
thousand  and  more  inhabitants.  This,  against  twenty-nine 
per  cent  in  the  United  States.  But  owing  to  the  vast  pre- 
ponderance of  distinctively  rural  industries  in  Australasia, 
it  is  evident  that  under  normal  and  healthy  conditions  the 
urban  population  ought  not  to  be  one-half  as  large  in  ratio 
as  in  the  United  States.  Under  such  artificial  conditions 
the  problem  of  industrial  stagnation  and  lack  of  employ- 
ment has  been,  and  is,  a  serious  one  in  this  vast  new  terri- 


SOCIAL  EXPERIMENTS   IN   AUSTRALASIA.         307 

tory  -which  should  be  greatly  expansive  in  its  development. 
Nothing  less  than  the  demonstrated  failure  of  experiments 
upon  a  large  scale  of  making  men  into  good  and  self-reliant 
citizens  through  legislative  and  sentimental  whitewashing 
will  convince  many  people  of  the  superiority  of  ethical 
education  and  general  character  unfoldment. 

Nothing  can  be  more  significant  than  the  fact  of  a 
merely  nominal  increase,  or  in  many  cases  the  positive 
decrease,  in  the  population  of  a  vast  undeveloped  domain 
like  Australasia,  which  should  naturally  be  in  the  enjoy- 
ment of  youthful  and  vigorous  growth.  In  New  South 
Wales  there  was  a  falling  off  in  the  annual  net  immigra- 
tion from  about  25,000  down  to  about  3,000  per  year, 
subsequent  to  1893.  In  Victoria,  from  1893  to  1900 
emigration  exceeded  immigration  by  about  120,000  people, 
mostly  able-bodied  men.  In  South  Australia,  since  1884 
there  has  been  a  net  loss  of  about  40,000.  It  also  has  less 
land  under  cultivation  than  it  had  so  long  ago  as  1881.  In 
New  Zealand  the  increase  in  population  is  merely  nominal, 
in  fact  it  ought  to  be  much  greater  from  the  excess  of  the 
birth  rate  over  the  death  rate  alone. 

Political  socialistic  railway  service,  bunglingly  and  in- 
efficiently administered,  is  doubtless  the  most  important 
element  in  the  decline  and  lessening  prosperity  of  a  great 
people  which  ought  to  be  well  fitted  for  progress  and 
prosperity. 

The  governments  of  Australasia,  instead  of  being  cen- 
tralized, unitary  and  statesman-like,  become  the  prey  of 
classes,  unions  and  sections,  and  the  representatives  of 
these  fragments,  even  if  they  are  not  technically  corrupted, 
have  an  irresistible  pressure  upon  them  for  local  benefit 
which  is  against  the  general  and  broader  good.  The  gov- 
ernment becomes  an  institution  whose  leading  function  is 


308       THE   POLITICAL  ECONOMY   OF    HUMANISM. 

to  be  plucked,  and  the  multiplication  of  official  employees 
under  the  socialistic  economy  favors  the  operation.  Legis- 
lation, from  its  normal  office  of  conserving  and  protecting 
private  interests,  stimulating  enterprise  and  guarding  the 
equities  of  all,  becomes  a  machine  —  under  an  illusive 
theory  of  altruism  —  to  circumvent  natural  law  and  dis- 
courage investment  and  immigration.  Financial  adminis- 
tration, owing  to  the  system,  falls  into  the  hands  of 
aggressive  political  factions. 

In  1888  the  necessity  in  New  Zealand  for  taking  the 
railways  out  of  politics  was  so  pressing  that  it  resulted  in 
legislation  which  brought  about  the  needed  change.  But 
in  1890  the  non-political  officials  who  had  the  administra- 
tive charge  of  these  highways  of  commerce,  greatly  offended 
the  trade  unions  by  defeating  their  dictatorial  attempt  to 
tie  up  the  railways  in  aid  of  the  great  maritime  strike  of 
that  year.  Through  their  influence,  aided  by  the  machine 
politicians,  in  1893  this  wholesome  legislation  was  repealed, 
and  the  railways  were  again  remanded  to  political  con- 
trol and  favoritism. 

It  must  not  be  inferred  from  the  unfavorable  facts  and 
statistics  given,  and  the  deductions  therefrom,  that  the  in- 
habitants of  Australasia  are  in  any  degree  inferior  in  their 
ethical  standards  and  average  purity  of  character  to  those 
of  any  other  civilized  nation.  They  are  rather  the  victims 
of  a  well-meant  but  defective  form  of  government.  With  a 
high  ideal  of  social  progress  and  reform,  and  a  desire  for 
greater  liberty,  they  unwittingly  forged  new  chains  in  un- 
wonted shapes,  in  the  very  name  of  freedom.  The  trouble 
comes  from  the  mistaken  assumption  that  altruism  can  be 
galvanized  upon  men  through  legislative  manipulation.  It 
ignores  evolution,  and  lacks  any  profound  understanding  of 
the  human  constitution. 


SOCIAL   EXPEELMENTS   IN   AUSTRALASIA.         309 

But  the  people  of  Australasia  are  doing  the  world  a 
great  service  in  the  practical  trial  upon  a  large  scale  of 
certain  social  theories  which  are  superficially  captivating. 
There  is  nothing  that  will  so  hasten  the  evolution  of  truth 
and  the  moral  development  of  a  genuine  socialism  as  posi- 
tive experiments,  even  though  they  be  dear  lessons.  Only 
by  some  provisional  infractions  of  natural  law  are  we 
enabled  to  discover  clearly  its  deeper  lines  and  avoid  fric- 
tion by  moving  parallel  with  them. 


INDEX. 


Abilities  of  men  not  equal,  162. 

Ability,  executive,  at  a  premium, 
177. 

Abstinence  necessary  to  the  would- 
be  capitalist,  56. 

Accumulation,  passion  of,  a  curse, 
183. 

Action  and  Reaction,  196-207. 

Agitators,  professional,  90. 

Alms-giving  not  the  best  help,  141. 

Altruism  demands  disciplinary  pen- 
alties, 93. 

distress  and  poverty  teach,  290. 

Antagonism  and  remedial  penalty, 
288. 

between  capital  and  labor,  99. 

in  society  assumed  to  be  neces- 
sary, 47. 

Apprenticeship  system,  273. 

Arbitration,  governmental,116-120. 

voluntary,  119. 

Association,  principle  of,  misappli- 
cations of,  76. 

spirit  of,  must  be  broadened, 

294. 
Astor  estate,  177. 

Banking  system,  evolution  of  the 
U.  S.,  215. 

system,  national,  an  outgrowth 

of  need  of  government,  202. 

Banks,  national,  as  monoplies,  216. 

state,  215. 

Barbarism,  insecurity  of  private 
property  a  cause  of,  153. 

Barbiirous  tribes,  currency  used  by, 
218. 

Baring  Brothers,  failure  of,  and 
panic  of  1890,  204. 

Barter  unsuited  to  civilized  com- 
munities, 212. 

Beneficence  must  be  voluntary,  172. 


Benevolence  not  a  function  of  busi- 
ness corporations,  243. 
Bimetallism,  218. 

by  natural  law,  224. 

Black-listing,  106. 

"  Booms  "  and  panics,  196-207. 

Boycott  an  injury  to  society,  87. 

extreme    application    of,    in 

Australia,  90. 

Brotherhood  of  locomotive  engi- 
neers, 81. 

Business,  dull,  caused  by  dishon- 
esty, 247. 

methods  vs.  those  of  senti- 
mentalists, 78. 

Canal,  the  first  English,  258. 

Capital  and  Labor;  can  they  be 
harmonized?  158-168. 

benefits  all  classes,  164,  181. 

combinations  of,  60-72. 

defined,  159. 

effect  of  annihilation  of,  78. 

labor  unions  antagonistic  to,77. 

not  limited  in  quantity,  159. 

short  average  life  of,  180. 

See  Labor  troubles. 

Capitalist,  difference  between  cor- 
poration and,  240. 

would-be,  must  practise  absti- 
nence, 56. 

Centralization  a  condition  of  wide 
distribution,  244. 

law  of,  186-194. 

Character  and  competition,  35. 

and  extinction  of  price,  32. 

andin  dustrial  education,  279. 

defective,  of    manapons    the 

bane  of  corporations,  247. 

defective,  the  cause  of  failure, 

43. 


311 


312 


INDEX. 


Character,  defective,  the  cause  of 
ills  of  society,  94. 

degraded  by  voluntary  depen- 
dence, 139. 

inefiELcient  service  deteriorates, 

92. 

labor  unions  unfavorable    to 

manly,  80. 

Charity,  mistaken,  141. 

money  given  in,  increasing, 

171. 

should  be  scientific,  138. 

See    Beneficence    and     Philan- 
thropy. 

Cities,  growth  of,  189. 

Citizenship,  good,  and  moral  edu- 
cation, 275. 

Civilization  and  centralization,  188. 

depends  upon  property  rights, 

153. 

Classes,  interests  of,  mutual,  47. 

Clearing-house  certificates,  207. 

Coinage,  money  and,  210-224. 

Colleges,  deficiencies  of  work  of, 
278. 

Combinations  amongst  employers, 
106. 

and  natural  tendencies,  29. 

menace    of,    to    government 

overrated,  193. 

of  capital,  60-72. 

See  Monopolies. 

Commerce  and  the  American  boy, 
276. 

evolution  of  the  large  retail 

establishment,  190. 

increased  by  credit,  214. 

Stewart  estate,  178. 

Communism,  voluntary  local,  152. 

Competition  and  Co-operation  sup- 
plementary, 43. 

natural  monopolies,  68. 

between  parts  having  like  func- 
tion, 101. 

blamed  for  evils,  93. 

has  lowered  rate  of  interest, 

179. 

. law  of,  17,  34-40. 


Competition  must  govern  until  an 
ideal  millenium  is  realized, 
154. 

price  and,  27. 

should  be  unrestricted,  131. 

unrestricted,  and  liberty,  294. 

Competitive  system  a  scapegoat, 
151. 

beneficent,  43. 

Conciliation  superior  to  arbitration, 
119. 

Confidence  a  subjective  factor  of 
money,  214. 

conditions  for,  112. 

lack  of,  and  panics,  203. 

the  life-blood  of  prosperity,  92. 

want  of,  in  railroad  manage- 
ment, 248. 

Consolidation  of  railroads,  260. 

cheapens  service,  267. 

Consumption  lowered  by  high  tar- 
iff, 229. 

Contract,  freedom  of,  the  corner- 
stone of  true  government,  117. 

shall  freedom  of,  be  destroyed  ? 

91. 

Co-operation  an  element  in  profit 
sharing,  104. 

a  remedy  for  labor  troubles,  165. 

competition  an  element  in,  36. 

effect  of,  without  competition, 

38. 

law  of,  42-48. 

See  Association  and  Profit-shar- 
ing. 

Comers,  61-72. 

"  French  Copper  Syndicate," 

64. 

usually  unsuccessful,  28. 

Corporate  management,  abuses  of, 
246-253. 

Corporation,  the  modem,  238-244. 

Counterfeits  under  State  banking 
system,  216. 

Credit,  214. 

high,  valuable  to  States,  222. 

Crime  and  industrial  education,  279. 

Currency,  effect  of  war  of  1861  on, 
201. 


INDEX. 


313 


Cm-rency,  relation  of  volume  and 
purchasing  power,  202. 

the  cause  of  panic  of  1893,  204. 

See  money. 

Debt  and  panics,  198. 

Debtors  injured  in  the  end  by 
cheapened  currency,  222. 

Degradation  caused  by  idleness,  53. 

Demand  an  element  of  value,  40. 

supply  and,  24-32. 

Democratic  party,  position  of,  upon 
the  tariff,  229. 

Demonitization  of  silver,  220. 

Dependence  and  poverty,  134-141. 

Despotism  in  the  guise  of  philan- 
thropy, 117. 

Discontent,  cause  of  amongst  man- 
ual laborers,  162. 

Discrimination  in  rates  by  rail- 
roads, 2C4. 

Domestic  service  and  competition, 
37. 

false  pride  about,  93. 

Drudgery  eliminated  by  education, 
278. 

Duties,  incidents  of,  235. 

kinds  of,  234. 

Economic  evils,  cause  of,  15. 
See  Ills  of  society. 

Economy.     5ee  Social  economy. 

Education,  conventional,  and  ethi- 
cal training,  274. 

inadequate,  273. 

of  individual  the  basis  of  true 

co-operation,  46. 

the  great  need  of  the  wage- 
worker,  110. 
■See  Industrial  education. 

Eight-hour  system  in  Chicago,  83. 

Employees,  advantages  of  having, 
shareholders,  104. 

how   to  secure  allegiance  of, 

102. 

not  machines,  100. 

obligations   and  privileges  of, 

108-113. 

Employer,  aim  of  laborer  to  be- 
come an,  55. 


Employers  and  profit-sharing,  98- 

106. 
Emulation,  influence  of,  38. 

Enterprise  the  great  stimulus  to. 
154. 

Environment  as  a  factor  of  happi- 
ness, 290. 

effect  of,  upon  American  work- 
man, 231. 

good  of  individual  as  related 

to,  287. 
Ethical  training  necessary,  274. 
Evil  defined,  286. 
Evils.    iSee  Economic  evils. 

Evolution, mind  asafactorin  social, 
57. 

of  the  large  retail  establish- 
ment, 190. 

the  great  interpreter,  291. 

Excellence,  influence  of  labor 
unions  against,  79. 

Exchanges,  intrinsic  value  of 
money  alone  considered  in  for- 
eign, 214. 

Factory  legislation,  129. 

Failure  due  to  defects.in  character, 
43. 

Faithfulness  stimulated  by  profit- 
sharing,  102. 

Farmer  and  the  tariff,  233. 

Fiat  element  in  ideal  currency,  212. 

Fortunes,  can,  be  limited?  172. 

great,  and  development  of  rail- 
road system,  175. 

more  difficult  to  acquire  than 

formerly,  178. 

unearned,  248. 

Freedom  of  contract,  shall,  bo  de- 
stroyed? 91. 

subverted  by  labor  unions,  81. 

Free  list,  235. 

Freight  rates,  263. 

a  century  ago,  259. 

decline  in,  since  1865,  265. 

effect  of  reduction  in,  69. 

, normal,  defined,  266. 

See  Railroad  tariffs. 

"  French  Copper  Syndicate,"  64. 

Futures,  speculation  in,  69. 


31-i 


INDEX. 


Good  defined,  286. 

of  individual  as  related  toen- 

vironmeut,  287. 

Gold,  qualities  commending,  for 
\ise  in  coins,  216. 

ratio  of  value  of,  to  silver,  219. 

Government,  menace  of  combina- 
tion to,  overrated,  193. 

our  free,  favorable  to  produc- 
tion, 58. 

ownership    of    railroads,    250, 

269. 

"  Granger  laws,"  126. 

Greeley,  Horace,  upon  volimtary 
local  communism,  152. 

Growth,  law  of,  14. 

Happiness,  environment  as  a  fac- 
tor of,  290. 

not     a    necessary    effect    of 

wealth,  161. 

proportioned  to  merit,  93. 

Harmony  between  capital  and 
labor,  can,  be  realized  ?  158-168. 

conditions  of  social,  46. 

how  to  secure,  100. 

intuition  and  social,  295. 

See  Conciliation. 

Health  and  overwork,  52. 

Heredity,  laws  of,  tend  to  disperse 
wealth,  180. 

Hours  of  labor,  92. 

in  Chicago,  83. 

statutory  regulation  of,  128. 

Idealism,  natural  law  and,  284- 

295. 
Ideals  and  progress,  293. 
Idleness  a  torture.  111. 

bad  effects  of,  53. 

Ignorance  a  cause  of  want,  94. 
Ills  of  society,  legislation  involved 

to  cure,  147. 

no  panacea  for,  164. 

the  outcome  of  defective  char- 
acter, 94. 
See  Economic  evils. 
Improvidence  caused  by  idleness, 
53. 


Independence  defined,  54. 

Industrial  education,  272-281. 

an  agency  for  cure  of  social 

ills,  94. 

"  Industrials,"  speculation  in,  and 
panics  of  '90  and  '93,  204. 

Industry,  influence  of  labor  unions 
against,  79. 

purpose     of    legislation    and 

political  science  to  protect,  154. 

Inflation  a  calamity  to  labor,  174. 

effect  of,  on  wages,  222. 

eras  of,  make  accumulation  of 

wealth  easy,  173. 

Inheritance,  laws  of,  tend  to  dis- 
perse wealth,  179. 

Intemperance  caused  by  idleness, 
53. 

Interdependence  of  mankind,  289. 

Interest  has  declined  with  increase 
of  wages,  161. 

declining,  179. 

effect  of  legislation  upon,  27. 

rate  of,  paid  by  railroad  invest- 
ments, 268. 

Interstate  commerce  law,  262,  265. 

Intuition  and  social  harmony,  295. 

Investments,  effect  of  unrest  upon, 
91. 

made    difficult    by    dishonest 

corporate  management,  248. 

Investors  and  railroads,  260. 

Jervis,  John  B.,  upon  railroad 
property,  260. 

Knowledge,  useful,  defined,  16. 

Labor,  all  kinds  of,  interdepen- 
dent, 111. 

and  capital,  can,  be  harmon- 
ized ?  158-168. 

and  production,  50-58. 

causes  of  over-supply  of,  92. 

combinations  of,  74-95. 

defined,  159. 

demand  for,  increases  with  ad- 
vance of  civilization,  161. 

does,  receive  a  fair  share  of  the 

product?  162. 

indispensable  to  manhood,  93. 


INDEX. 


315 


Labor,  inflation  a  calamity  to,  174. 

manual,  not  degrading,  53. 

money  stored  up,  212. 

See  Hours  of  labor. 

Laborers  and  their  champions,  6. 

cause  of   discontent  amongst 

manual,  162. 

labor    unions    tyrannize    over 

unorganized,  87. 

standard  of  living  of,  in  the 

U.  S.,  231. 

unorganized,  ignored,  88. 

See  Employee. 

Laboring  man,  competition  and,  39. 

meaning  of  term  improperly 

restricted,  39. 

Labor  troubles,   profit-sharing  the 
remedy  for,  104,  166. 

the  spirit  that  harmonizes,  101. 

See  Harmony. 

xmion,  the  ideal,  94. 

unions  and  American  youth, 

274. 

bad  effects  of,  upon  laborers, 

55. 

effect  of,  upon  wages,  30. 

fight  of,  for  exclusive  recog- 
nition in  Australia,  89. 

put  a  premium  upon  incompe- 
tency, 39. 

when,    are   mere   animal   co- 
operation, 45. 

Labor-value,  how,  is  fixed,  160. 

the  sole  basis  for  protection, 

231. 

Land,  effect  of  governmental  own- 
ership of,  154. 

made   valuable   by  railroads, 

176. 

Law  defined,  286. 

foundation  of  human,  19. 

place  of,  in  human  life,  291. 

universality  of  7,285. 

See  Natural  law. 

Laziness  a  cause  of  want,  94. 

Leclair's    experience  with    profit- 
sharing,  102. 

Legal  tender  in  colonial  times,  212. 


Legislation  and  the  panic  of  1893, 
206. 

an  element  in  ideal  currency, 

212. 

economic,  and  its  proper  lim- 
its, 122-131. 

generally  negative,  293. 

in  favor  of  debtors  harmful, 

222. 

invoked  to  cure  social  ills,  147. 

lax  in  dealing  with  abuses  of 

corporate  management,  248. 

limited  power  of,  14. 

not  identical  with  natural  law, 

291. 

purpose  of,  to  protect  industry, 

154. 

reform  of  abuses  in  railroad 

management  by,  250. 

restrictive  railroad,  detrimen- 
tal, 265. 

special,  dangerous,  117. 

tendency  towards  general,  af- 
fecting corporations,  242. 

Liberty  requires  imrestricted  com- 
petition, 294. 

Living,  standard  of,  of  laborers  in 
the  U.  S.,  231. 

Lock-outs,  106. 

"  Long  and  short  haul  clause,"  265. 

Machinert,  effect  of  labor-sav- 
ing, 56. 

on  tariff,  231. 

Man,  the  ideal,  53. 

Management,  abuses  of  corporate, 
246-253. 

disadvantages  of  governmen- 
tal, 124. 

Manual  employment  and  false 
pride,  274. 

the  American  boy,  276. 

Training.  See  Industrial  edu- 
cation. 

Margins,  70. 

Mental  force  exceeds  manual  force 
in  its  reward,  162. 

Mind  an  increasing  factor  in  social 
evolution,  .57. 

increases  production,  183. 


816 


INDEX. 


Misery,  pictures  of,  do  not  arouse 
men  to  action,  1136. 

Money  and  coinage,  210-22'J 

stored-up  labor,  212. 

See  Currency. 

Monometallism,  silver,  221. 

Monopolies,  causes  and  tendencies 
of,  188. 

national  banks  as,  216. 

natural,  and  competition,  68. 

rates  of  railroad,  governed  by 

natural  law,  267. 
See  Combinations,  Trusts,  Stan- 
dard   Oil    Co.,    and    Western 
Union  Telegraph  Co. 

Municipalism,  limits  of,  123. 

Nationalists,  plan  of  the,  147. 
Nationalization  of  railroads,  250. 

chimerical,  269. 

Natural  law  and  idealism,  28i-295. 

characteristic  of,  13. 

reliability  of,  16,  20. 

scope  of,  14. 

supremacy  the  result  of  knowl- 
edge of,  57. 

Organism:  and  unlike   functions, 

292. 

society  an,  295. 

Organization,    more   efficient,   the 

basis  of  corporations,  240. 
Over-production,  how  to  abolish, 

112. 

influence  of  tariffs  on,  2.33. 

Overtrading  a  cause  of  panics,  198. 
Overwork  harmful,  52. 

Panaceas  not  a  remedy  for  the  ills 
of  society,  15. 

Panic  and  distrust  of  fiat  element 
in  money,  214. 

"Booms  "  and,  196-207. 

caused  by  labor  unions,  91. 

of  1893,  215. 

Paternal  government  cannot  har- 
monize capital  and  labor,  165. 

fosters  dependence,  140. 

Paternalism  and  competition,  39. 


Pauperism  and  poverty  differ,  140. 
Penalties  beneficent,  287. 
Philanthropy    may    make    despo- 
tism, 117. 

on    business    principles;    the 

Pullman  Co.,  105. 

true,    requires    the    study    of 

causes,  94. 
See  Charity. 

Political  economy  and  exact  sci- 
ence, 292. 

and  the  place  of  mind,  294. 

conventional,  6. 

defined,  18. 

factors  in,  204. 

relation  of,  to  the  mind,  286. 

standpoint  of  ideal,  295. 

study  of,  16. 

Political  science,  purpose  of,  to  pro- 
tect industry,  154. 

Population  flows  to  cities,  187. 

Postage,  effect  of  lower  rates  of,  192. 

rates  of,  258. 

Poverty  and  competition,  37. 

are  the  poor  growing  poorer 

and  the  rich  riclier  ?  173. 

dependence  and,  134-141. 

no  panacea  for,  164. 

not  an  evil,  288. 

Precious  metals,  parity  of,  223. 

Price,  competition  and,  27. 

effect  of  trusts  on,  40. 

equalizes  supply  and  demand, 

26. 

extinction  of,  32. 

fluctuations      minimized     by 

modern  conditions,  179. 

imposition  of  artificial,  im- 
moral, 62. 

of    bread   regulated    by  law, 

127. 

of  railway  service,  263. 

Prices,  artificial,  short-lived,  28. 

fall  in,  203. 

Product,  does  labor  receive  a  fair 
share  of,  162. 

effect  of    prevailing  fallacies 

on,  39. 


INDEX. 


317 


Product  of  manual  labor,  increase 
in,  151. 

Production  a  minimum  under  so- 
cialism, 149. 

distribution  of  instruments  of, 

231. 

increases  with    brain  power, 

183. 

in  England  and  the  U.  S.  com- 
pared, 232. 

• labor  and,  50-58. 

natural  unit  in,  99. 

not  solely  the  result  of  physi- 
cal labor,  109. 

our  free  government  favorable 

to,  58. 

the  great  stimulus  to,  154. 

Professions  overcrowded,  273. 

Profit-sharing,  employers  and,  98- 
106. 

the  remedy  for  labor  troubles, 

166. 

Progress  accelerated  by  competi- 
tion, 38. 

and  ideals,  293. 

conditions  of,  52,  54. 

depends  upon  diversity,  292. 

key  to,  19. 

law  of  ecomonic,  58. 

socialism  fatal  to,  146. 

Progression,  how,  takes  place,  292. 

Property  rights  the  basis  of  civili- 
zation, 153. 

rises  in   value   during  periods 

of  intiatiou,  174. 

Prosperity  depends  upon  confi- 
dence, 92. 

jeopardized  by  strikes,  82, 

permanent,  223. 

precedes  panics,  200. 

results  from    bedience  to  law, 

47. 

sacrificed  by  frequent  changes 

in  tariff,  230. 

the  great  stimulus  to,  154. 

Protection,  tariffs  and,  226-236. 

Public  opinion  lax  in  dealing  with 
abuses  of  corporate  manage- 
ment, 248. 


Pullman  Car  Co.,  successful  ex- 
periment of,  in  benefiting 
workmen,  105. 

Purchasing  power  of  money,  in- 
creasing, 217. 

Quality  an  element  of  value,  40. 

Railroad  building,  abnormal,  the 
cause  of  panic  of  1873,  202. 

evolution  of  the,  256-270. 

management  often  dishonest, 

249. 

system,  development  of,  and 

great  fortunes,  175. 

tariffs  and  legislation,  28. 

tariffs  by  legislation,  effect  of 

fixing,  126. 

tariffs  fixed  by  natural  law, 

127. 
See  Freight  rates. 

Railroads,  governmental  manage- 
ment of,  125. 

governmental    ownership  of, 

250,  269. 

strike  of  1886  on  Gould  sys- 
tem of,  82. 

wrecking    and  reorganizing, 

251. 

Raw  material  ?  what  is,  234. 
Reaction,  action  and,  196-207. 
Real  estate,  is,  better  than  other 

investments?  177. 
Realism  will  not  cure  the  ills  of 

society,  136. 
Reciprocity  and  exports,  233. 
Republican   party,    position,  upon 

the  tariff,  229. 
Retail  establishment,  evolution  of 

the  large,  190. 
Retaliation  provoked  by  unfriendly 

tariffs,  23:5. 
Retribution,  288. 

inevitable,  20. 

Boads  of  the  Roman  Empire  and  of 
Europe  in  the  Middle  Ages, 
257. 

Schools,  criticism  of  common,  274. 
Self-interest  and  social  economy, 13. 
Selfishness,  law  of,  287. 


318 


INDEX. 


Sontimentalism  leads  astray,  15. 
methods  of,  vs.  those  of  real 

business,  78. 

opposed  to  natural  law,  152. 

Service,    effect   of    legislation    on 

rates  of,  28. 
Shareholders,  how  interests  of,  can 

be  protected,  252. 
relation  of,    to   corporations, 

242. 

restrictive  railroad  legislation 

unjust  to,  265. 

victims  of  a  false  system,  249. 

"  Sherman  law,"  205. 

Short  sellers,  70. 

Shutting  down  involves  loss,  193. 

Silver,  demonitization  of,  220. 

qualities  commending  use  of, 

for  coins,  216. 

question,  221. 

ratio  of  value  of,  to  gold,  219. 

Slum  population,  character  of,  135. 

Slums  need  optimism,  137. 

Social  economy,  motive  of,  13. 

evils.    iSee  Ills  of  society. 

Socialism  as  a  political  system, 
144-155. 

basic  fallacy  of,  181. 

genius  of,  154. 

influence  of  labor  unions  to- 
wards coercive,  88. 

Socialistic  experiments,  voluntary 
local,  151. 

party,  animus  of,  destructive, 

148. 

Social  system,  relation  of,  to  de- 
velopment, 14. 

War.    See  Antagonism. 

Society  an  organism,  295. 

Solidarity  of  the  human  race,  289. 

Speculation  and  panics,  198. 

stimulated  by  dishonest  cor- 
porate management,  248. 

Spoils  system  opposed  to  govern- 
mental management,  125. 

Standard  of  living  of  workmen  in 
theU.  S.,231. 

Oil  Co.,  191. 


Standard  Oil  Co.,  a  case  of  suc- 
cessful competition,  37. 

why  the,  is  successful,  67. 

State  interference,  122-131. 

Stewart  estate,  178. 

Stockholder.    See  Shareholder. 

Stock-watering,  2G8. 

does  not  affect  the  rates  of  ser- 
vice, 192. 

Strikes,  consequences  of,  illus- 
trated, 81. 

Success  comes  by  natural  law,  110. 

not  due  to  chance  or  luck,  180. 

secret  of,  112. 

Suffering,  causes  must  be  studied 
to  remove,  94. 

Sugar  trust,  66. 

Supply  and  demand,  24-32. 

apply  to  charity,  138.' 

govern    purchasing    power  of 

currency,  202. 

Tariffs  and  protection,  226-236. 

Technical  education.  See  Indus- 
trial education. 

Telegraph  rates,  effect  of  reduction 
in,  69. 

Trade  schools.  See  Industrial  edu- 
cation. 

Transgressions,    economic,     bring 

their  remedies,  288. 
Transportation,  265-270. 
rates,  pool,  short-lived,  28. 

iSee  Railroads. 
Travelling      facilities      by      rail, 

changes  in,  261. 
Trusts,  61-72. 
and  prices,  40. 

See  Monopolies. 
Truth  always  beneficent,  17. 

conditions  for  finding,  17. 

Tulip  mania  in  Holland,  199. 

Under-valuation  and  ad  valorem 

duties,  234. 
Unearned  increment,  is  there  an, 

177. 
Unionism.    See  Labor  unions. 


INDEX. 


319 


Union   should   be   between  parts 

forming  productive  unit,  102. 
Unions,  unnatural,  99. 
Unselfishness,  how,  is  unfolded,  li. 
Usury  laws  injurious,  128. 

Value,  effect   of   fluctuations  of, 

I7t. 

how,  is  affected,  40. 

how,  is  conferred,  72. 

ideal  currency  must  have  in- 
trinsic and  stable,  212. 

sentiment  a  factor  in,  204. 

"Values,  natural  law  weighs,  110. 
Virtues,  competition  applies  to,  36. 
should  be  taught,  275. 

"Wages  and  labor  unions,  40. 
education    the    basis    of    in- 
creased, 110. 

effect  of  labor  unions  on,  30. 

when,  are  increased  by  pres- 
sure of  labor  unions,  84. 


"Wages,  how,  are  increased,  31. 

increase  of,   accompanied    by 

decline  of  interest,  161, 
rate  of,  advancing,  86. 

regulated   by  supply  and  de- 
maud,  80. 

should    not    be    fixed  bv  the 

state,  118. 

Want,  causes  of,  94. 

"Watering  stocks.   See  Stock-water- 
ing. 

"Wealth,  a  curse  when  dishonestly 
acquired,  112. 

and  its  unequal  distribution. 

170-183. 

great  accumulations  of,  benefit 

the  poor,  160. 

happiness   not  a  necessaiy  ef- 
fect of,  161. 

"Western  Union  Telegraph  Co.,  68. 

monopoly  tends    to    cheapen 

service,  191. 

"Work  a  blessing,  110. 

theory  of  minimum,  92. 


HENRY   WOOD'S   BOOKS 


Qod's   Image    in    Man 

Some  Intuitive  Perceptions  of  Truth 

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Studies  in  the  Thought  World 

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